Enterprise Softwarehttp://www.businessinsider.com/category/enterprise-software
en-usSun, 02 Aug 2015 17:07:40 -0400Sun, 02 Aug 2015 17:07:40 -0400The latest news on Enterprise Software from Business Insiderhttp://static3.businessinsider.com/assets/images/bilogo-250x36-wide-rev.pngBusiness Insiderhttp://www.businessinsider.com
http://www.businessinsider.com/how-office-365-is-beating-google-apps-2015-3Everyone is talking about how Microsoft Office 365 is suddenly beating Google Appshttp://www.businessinsider.com/how-office-365-is-beating-google-apps-2015-3
Fri, 06 Mar 2015 17:05:44 -0500Julie Bort
<p><img style="float:right;" src="http://static2.businessinsider.com/image/54c79949ecad04ba45365368-1200-924/satya-nadella-microsoft-39.jpg" border="0" alt="Satya Nadella Microsoft"></p><p>Microsoft has been telling us for eons that it is eating Google Apps' lunch, but hasn't backed that up with cold, hard figures.</p>
<p>Now, all of a sudden, sources all over the tech industry are noticing that Office 365 is everywhere.</p>
<p>And it's all because of one thing: Microsoft is telling customers to move their email to Microsoft's cloud instead of buying another Exchange server and hosting email in their own data centers, says Todd McKinnon, co-founder and CEO of Okta.</p>
<h2>Office 365 usage has 'skyrocketed'</h2>
<p><img style="float:right;" src="http://static4.businessinsider.com/image/54fa171569beddbb260b2642-600-701/okta-apps-usage-office-365.png" border="0" alt="Okta apps usage Office 365" height="400" style="border: 1px solid black;">Take Okta, for example. Okta offers a security service that helps companies keep track of employee passwords and accounts to all the cloud services the enterprise uses.</p>
<p>It has over 2,000 customers tracking 4 million users, cofounder and CEO Todd McKinnon tells us.</p>
<p>"Over the last six to nine months, Office 365 usage has skyrocketed," he told us.&nbsp;"We see it on our network. We see usage of applications."</p>
<p>Up until last October, Google Apps was more popular, he said, and Salesforce and Box were the most popular apps used at work.</p>
<p>That's all changed. "Office 365 hasn’t quite taken over Salesforce.com yet, but it probably will in the next few months," he says.</p>
<p><img style="float:right;" src="http://static4.businessinsider.com/image/54fa1e7c6da8110454915b9a-1200-924/okta-co-founder-and-ceo-todd-mckinnon.jpg" border="0" alt="Okta co-founder and CEO Todd McKinnon">This is happening because Microsoft "is going around to every organization in the world and saying, 'hey, you know your email, you're on-premise Exchange server? You need to move that to the cloud. And here's financial incentives to do that." (Here's<a href="http://www.businessinsider.com/microsofts-cloud-consumption-problem-2015-3"> some details on how Microsoft is structuring those financial incentives</a>.)</p>
<p>"It's like a tidal wave," McKinnon says. "Every company is looking to solve identity and mobility challenges because Microsoft is telling them to move email to the cloud."</p>
<h2>Others see Office 365 everywhere, too</h2>
<p><img style="float:right;" src="http://static4.businessinsider.com/image/54f501486bb3f7337dff49fb-461-345/office-ipad-2.jpg" border="0" alt="office ipad">Okta is not alone in telling us this. Security service BetterCloud, which was 100% focused on security tools for Google Apps, just launched <a href="https://www.bettercloud.com/microsoft-office-365/">an Office 365 beta</a> two weeks ago because it was getting so many inquiries from companies asking it for Office 365, a spokesperson told Business Insider.</p>
<p>Ditto for <a href="http://www.bitglass.com/">BitGlass</a>, which also offers security services for Google Apps, Office 365 and Salesforce. In a survey of 81,000 users <a href="http://pages.bitglass.com/infographic_cloud-adoption-report.html">conducted a year ago</a>, it found that Google Apps was far more popular, accounting for 16% of user's email, compared to Office 365 at not quite 8%.</p>
<p>In a survey it plans to release next week, the company revealed to Business Insider that Office 365 has now overtaken Google Apps in terms of usage.</p>
<p>"Office 365 has surged ahead of Google in the enterprise and is dominating future enterprise deployment plans (29%) versus Google Apps (13%)," a spokesperson told us.</p>
<p>To be sure, Office 365 is not taking market share away from Google Apps, but from old-school email software, mostly Microsoft Exchange.</p>
<p>Whereas about one-quarter of users Bitglass surveyed last year had email in the cloud, 42% of them are using cloud email this year.</p>
<p>Why is Microsoft winning? Workers like the Outlook email program, and they get that same Outlook look and feel with Office 365, McKinnon says.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/microsofts-cloud-consumption-problem-2015-3" >Satya Nadella is cleaning up Microsoft's 'dirty little secret'</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/google-apps-little-known-features-2015-3" > 15 amazing features in Google Apps you probably don't know about</a></strong></p>
<p><a href="http://www.businessinsider.com/how-office-365-is-beating-google-apps-2015-3#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/interview-google-amit-singh-2015-2We talked to the head of Google's next multibillion-dollar business. Here's what he told us (GOOG)http://www.businessinsider.com/interview-google-amit-singh-2015-2
Sun, 08 Feb 2015 08:00:00 -0500Julie Bort
<p><img style="float:right;" src="http://static3.businessinsider.com/image/54d3ea7b6bb3f73b6d822902-1200-924/google-amit-singh-3.jpg" alt="Google Amit Singh" border="0"></p><p>Five years ago <a href="http://allthingsd.com/20100326/google-nabs-longtime-top-oracle-exec-to-run-international-sales-for-enterprise-unit/">next month</a>, Google got serious about creating a new revenue stream for itself beyond search ads, and poached long-time Oracle executive Amit Singh.</p>
<p>Until then, Google had been dabbling with cloud computing and software as a service — the idea that you rent apps, delivered over the internet but hosted in someone else's data center, and pay for them via subscription. Its free version of Gmail was insanely popular. Its Google Apps was a hit with startups, small businesses, and schools.</p>
<p>But big companies were still afraid of the idea. They didn't think cloud apps were reliable enough and wouldn't go down. They didn't think they were secure enough from hackers, either, and could make sure they complied with laws that cover such things.</p>
<p>And Google didn't even have the sales systems in place woo them, much less to help them after they signed up.</p>
<p>Enter Singh. He had the important but not glamorous job of building for Google its first-ever enterprise sales, marketing, and support systems.</p>
<p>Since then, enterprises, which spend about $4 trillion a year worldwide on tech, have fallen in love with cloud computing. They are shifting their dollars there at a fast rate. Synergy Research Group says cloud computing <a href="https://www.srgresearch.com/articles/aws-market-share-reaches-five-year-high-despite-microsoft-growth-surge">generated $16 billion for its biggest players over the past 12 months</a>.</p>
<p>And 2014 was a stellar year for Singh, too.</p>
<p>In an exclusive interview with Business Insider, Singh told us, "I believe we’re ready for all of them, both in the product and the readiness to support them," he said, adding, "All the pieces are now in place."</p>
<p>These pieces include:</p>
<ul>
<li>A <a href="http://www.businessinsider.com/google-anti-microsoft-arsenal-2015-2">bigger set</a> of cloud and other products for the enterprise than you probably realize, all under a division at Google called Google for Work.</li>
<li>An <a href="http://www.businessinsider.com/google-plan-to-beat-microsoft-office-2015-2">ingenious plan</a> that will squeeze customers into Google's arms without demanding that they completely ditch Microsoft email, or Office.&nbsp;</li>
<li>Big marquee customers, including a deal in 2014 that signified to Singh that Google for Work was officially successful.</li>
</ul>
<p>Here is a lightly edited transcript of the conversation.</p>
<p><strong>Business Insider: Exactly how many products or business units at Google are dedicated to “enterprise” or, as you call it now “Google for Work”?</strong></p>
<p><strong>Amit Singh:</strong> 1. Search. Search for Work is called Google Search Appliance. [It was the first enterprise product.] It came before the cloud.<br>2. Gmail. Gmail for Work is why people come. Gmail for Work is part of the suite called Google Apps.<br>3. Drive is the next thing I would call out. Drive for Work. [Note: this is cloud storage that includes Google Apps]<br>4. Docs, for collaboration [the word processor that's part of Google Apps]<br>5. Videoconferencing which we call Hangouts, which is meetings.<br>Those are the three big chunks in the Google App suite, although there are other apps in the suite like Sites.6. Then there’s Chrome. [The] Chrome [team] built the browser for Work, Chrome for Work, which is free but we provide support for it.<br>7. Then there’s Chromebooks. Chromebooks for Work.<br>8. Chromebox for Meetings. [A device for running secure videoconferencing meetings.]<br>9. Android for Work [includes special security for business use and also products like Android Auto, Android for cars]<br>10.Then there’s cloud, that’s a big thing.<br>11. The last is Maps. Maps is the API for developer really the primary product. We embed that as part of Auto, when you use inside a car like Tesla, but mostly Maps API, Places API, those other products for work.</p>
<p><strong>BI: But you can’t buy some of these separately like Gmail or Docs, you would get them as part of Google Apps.</strong></p>
<p><strong>AS:</strong> Yes, but those are the line items, the way I think about our products.</p>
<p><strong>BI: When they brought you on five years ago, did Google already have anything in place to win big enterprise customers?</strong></p>
<p><strong>AS: </strong>When I came on board its 2009, we were just starting to build critical mass in education and in small business for apps, for Google Apps. And [around here], it was like, "That’s kind of cute. That’s nice, but whatev."</p>
<p>But that became such a big thing, education became such a big user of Google Apps, and that’s where the next generation of employees &nbsp;is coming to work.</p>
<p><strong>BI: As I understand, the big problem with Google Apps at that time was classic enterprise support. Google didn't have anything like that in place and big companies wouldn't work with you.</strong></p>
<p><strong>AS:</strong> Yes. My work, it was building out first-time response so when they call they get an answer. Building a knowledge-base underneath it so all bugs were tracked and there’s an SLA ["service-level agreement"] with engineering where we respond in X amount of time. Building an ecosystem and a deployment and methodology that people can count on.</p>
<p>This is blocking and tackling. It’s not that glamorous.</p>
<p><strong>BI: So, after all that down and grungy work, was there a moment when you knew you were succeeding?</strong></p>
<p>AS: Over the last year or 18 months, it culminated for me, there’s two major, maybe three major events that I would point out, in no particular order.</p>
<p>One was the fact that we indicated we were going to go big in cloud and put the entire company’s resources, and unlock all of our capacity, all the algorithms, the focus internally to make everything cloud centric. That’s one.</p>
<p>It was a growing up. You have to build for everybody, not just internal Google developers. [Note: Google launched <a href="http://www.businessinsider.com/google-uses-pricing-storage-against-amazon-2013-5">Google Compute Engine in 2013&nbsp;</a> and by early 2014 was waging price and feature wars with Amazon and Microsoft.]</p>
<p>Another was when we won <a href="http://www.businessinsider.com/google-gets-huge-partner-to-sell-apps-2014-10">PwC, [announced in October].</a> They said, "we chose Google not only is it the best, it's the most secure." They did a multi-year [test], like any big company. It’s not just their data, it's their client data, as a consulting firm. For them to get comfortable on how we handle their data, security, it’s a symbol.</p>
<p>Other clients have come to us and said, "If they can do it, they are one of the most conservative brands in the world. We can do it."</p>
<p>Third, was the commitment we’re putting behind Android, and bringing it to Work, through our ecosystem, OEMs, partners like Samsung with their Knox initiative, etc.</p>
<p>When clients see Google engineering, product management, etc. all building products for them, it creates momentum. Along the way, wins like Costco and some of the biggest retailers in the world now on Google Apps. In regulated industries like Rockwell Collins in aerospace and defense, Roche and Genentech in pharmaceuticals, BBVA in finance. These are big 100,000 users all moving to Google Apps this in the last like two years.</p>
<p><strong>BI: Were there other moments that made you feel like Apps was now a genuine competitor?</strong></p>
<p><strong>AS:</strong> There was small wins along the way. Drive for Work came on. We have signed 240 million users [for all versions of Drive] in spite of some good alternatives. When you think about it, that’s probably grown faster than many other products at Google. Drive was announced about 20 months ago <a href="http://googleblog.blogspot.com/2012/04/introducing-google-drive-yes-really.html">[April 24, 2012].</a></p>
<p>Then we announced Drive for Work last year and we're signing 1,800 clients every week. You know, that’s just pretty big scale.</p>
<p>But a lot of the unglamorous stuff is [what it took], like product roadmaps, communicating them regularly to clients. Getting their feedback so it gets reflected. To be sure, we don’t build everything they want … we have to build stuff for everyone.</p>
<p><strong>BI: And a salesforce? Didn’t you have to build out an enterprise salesforce to do this? You had like almost none …</strong></p>
<p><strong>AS:</strong> Yeah. We’ve hired Carl [Schachter] from Salesforce.com, he was one of the business founders there. [Now, Vice President, Americas for Google for Work] And Sebastien [Marotte] from Oracle [Now, Vice President, Cloud Platform, Google Apps for Work].</p>
<p>We had a good team here. But we really scaled that out. We built out customer advisory boards and teams that just cover certain large customers. We feel like we are now ready for that. The daily thing is a lot of work. Done in the Google way.</p>
<p><strong>BI: What do you mean by "done in the Google way?"</strong></p>
<p><strong>AS:</strong> It’s not just the sales and support. We’re really focused on adoption. We want clients to get the most of this platform. And because we don’t have any legacy [older versions installed on PCs and servers], everyone’s on the same code base, which is the beauty of cloud based offerings. How do we get them more utilization? 'Hey, you are not using Docs the right way. How do we get you more training?'</p>
<p>With traditional software the thing was you deploy it yourself, versus, [us], where you are part of that product experience.</p>
<p><strong>BI: Ok, so other than posting tips online, how do you get them to use Google Apps more?</strong></p>
<p><strong>AS:</strong> We created a community of not just IT admins but end users. And we’re going to expand that this year, where they can come in and learn from each other and experts where they can be trained on new things coming out.</p>
<p>[That's called <a href="http://learn.googleapps.com/">Google Apps Learning Center</a>]</p>
<p><strong>BI: So are you trying to go after big Microsoft customers? When you’re talking about the F500, they all already have email …</strong></p>
<p><strong>AS:</strong> We’re ready for them now. I think the last 12 months we’ve proven to a) ourselves b) the market that the Apps are ready for adoption in large enterprises.</p>
<p>Now I think is the time to actually scale that even further, which is what our intention is.</p>
<p>We want to give them alternatives. Not everybody is ready for Gmail for example, but they can use Drive or Docs or Hangouts.</p>
<p>We had a client that saved in their first six months of $8 million in travel experience because they had the video experience like we do at Google (because we run Hangouts ourselves).</p>
<p>We’ve enabled people to come in for different things.</p>
<p>For instance, if you are struggling with a customer web site and it needs to scale for a big event. You can totally build it on Google and it will scale on App Engine. Or you really want the most secure environments for you’re employees to use, Chromebooks are good for that.</p>
<p><strong>BI: So you feel like you have a whole package of tech to offer to enterprises, right?</strong></p>
<p><strong>AS:</strong> We have the portfolio. So you don’t have to be just the one thing, which appeals to large customers because they are a journey. They have existing contracts. They might not be ready for one thing, but they want to try something else.</p>
<p><strong>BI: Do you have a goal about how many large enterprises you want as customers?</strong></p>
<p><strong>AS:</strong> I believe we’re ready for all of them, both in the product and the readiness to support them, to help them in their transformation journey. All the pieces are now in place.</p>
<p><strong>BI: It’s hard to get someone to yank out what they’ve got and go to something new. In your case, Excel is the thing. Sheets can’t really compete with Excel for those that already use it. Do you care about going head-to-head in such a way?</strong></p>
<p><strong>AS:</strong> Our stated goal with Docs is that we want to get to 85-90% of the functionality and in some cases hve new functionality ahead of the curve. I mean realtime collaboration in Docs, there’s no equal to that. I mean Office Web Apps is a poor proxy for that.</p>
<p>There’s actually very few content creators in enterprise. Most people are reading and doing very light editing — analysis has shown us that.</p>
<p>If that’s the case, why would everyone always have to have Excel, etc.? You have lots of users and you don’t have to license them all for Excel or Office. That population of creators and content authors is 10% or less.</p>
<p><strong>BI: That's what you did with PwC. They rolled out Google Apps to&nbsp;45,000 of their&nbsp;180,000 people. You are going to get, say, 25% of the users in a company? Or maybe 60%?</strong></p>
<p><strong>AS:</strong> I hope it's more like 80%. And the other way to think about it: People already own their Office licenses. You don’t have to give them up. Let the users choose. Using Google products for sharing or storage, they are just easier.</p>
<p>So give people an option and overtime reconcile your associated licensing on actual usage, not just on some upfront commitment and some long-term contract. That’s the old world of enterprise software. Today you should just pay for what you actually use, not for some arbitrary number of users.</p>
<p><strong>BI: Do you plan to integrate Apps features with with MS Office?</strong></p>
<p><strong>As:</strong> We do that today with Drive. All the Office formats have first-class citizenship. You can not only store them properly but when you open it, it opens them in their editor.</p>
<p>We acquired this company called Quickoffice a few years ago, and integrated its codebase into Doc. So you can say, "Hey, I’m on mobile, I just want to look at something really quick and it happens to be an Office format." It will render it perfectly (or nearly perfectly) you can do light editing and share it back, in native Office format.</p>
<p>You can also open MS Office in Drive and if you don’t have Office installed, it will open up QuickOffice.</p>
<p><strong>BI: So what’s your big goal with Google for Work, the next big thing you hope to accomplish?</strong></p>
<p><strong>AS:</strong> Two things. 1. The vast bulk of computing is still on-premise [Note: that means it is installed on PCs and computer servers owned by companies] and most of it will move to the cloud over a much shorter period than people give it credit for.</p>
<p>That’ll happen and we want to provide cloud infrastructure and the best of Google’s algorithms and computer science knowledge over the last 15 years for developers in enterprise.</p>
<p>You’ll see us make progress in the next six months, two quarters, about all the things we plan to release.</p>
<p>2. This movement from desktop to mobility at work, which has lagged consumers. Consumers are mostly on their phones now. I think that will come to work a lot faster, and we want to make sure Android is a first-class citizen, secure, manageable, etc..</p>
<p>I think those are the two near-term trends.</p>
<p>And if you believe those trends, there will be a new generation of applications written for enterprise, which will be built on cloud, for mobile which combine insights from different backend, legacy apps that people might have, but deliver it in intelligent fashion, as an assistant to you as you are working.</p>
<p><strong>BI: That sounds like Microsoft’s CEO Satya Nadella’s vision. I hear you saying, "Hello! We're Google! We'll have game there, too."</strong></p>
<p><strong>AS:</strong> Yeah, platforms like Google Now, where you have alerts, notifications and all that. Mobile the way they are delivered from many kinds of systems pulled together and delivered.</p>
<p>And in many cases wearables will have much more impact to enterprises. That will probably come closer to reality this year, too.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/google-plan-to-beat-microsoft-office-2015-2" >Google explains its plan to nab 80% of Microsoft's Office business</a></strong></p>
<p><a href="http://www.businessinsider.com/interview-google-amit-singh-2015-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/google-plan-to-beat-microsoft-office-2015-2Google shares its plan to nab 80% of Microsoft's Office business (GOOG)http://www.businessinsider.com/google-plan-to-beat-microsoft-office-2015-2
Sun, 08 Feb 2015 08:00:00 -0500Julie Bort
<p><img style="float:right;" src="http://static3.businessinsider.com/image/54d3cc0aeab8ea59128b456b-1200-924/google-amit-singh-1.jpg" alt="Google Amit Singh" border="0"></p><p>Ten years ago, Google declared war on Microsoft Office by offering a cheap alternative on the web, Google Apps.</p>
<p>Flash forward to 2015, and the company has big plans to grab 80% of the users at Microsoft's biggest customers.</p>
<p>In 2005, "The whole industry looked at us like we were crazy," Rajen Sheth, a director of product management for <a href="http://www.businessinsider.com/google-apps-exec-on-being-crazy-2015-1">Google's Enterprise team who worked on those early products, told us.</a></p>
<p>They don't think that way anymore. 2014 was a breakout year for Google in convincing large enterprises to use its email, word processing, spreadsheets, presentations, cloud computing, and cloud storage.</p>
<p>And we ain't seen nothing yet.</p>
<p>Amit Singh, president of Google for Work just <a href="http://www.businessinsider.com/interview-google-amit-singh-2015-2">shared with us his plans</a> to elbow its way into Microsoft's turf and walk away with, he hopes most of the users at large companies.</p>
<p>"We’re ready for them now. I think the last 12 months we’ve proven to a) ourselves b) the market that the Apps are ready for adoption in large enterprises. Now I think is the time to actually scale that even further," he told us.</p>
<p>The plan is simple but ingenious.</p>
<h2><strong>Step 1: Make sure that the apps Google offers have "85-90% of the functionality" of Office.</strong></h2>
<p>"And in some cases new functionality ahead of the curve. I mean realtime collaboration in Docs, there’s no equal to that. Office Web Apps is a poor proxy for that," says Singh.</p>
<h2><strong>Step 2: Don't worry about the remaining 10-15% of the features required by power users, particularly Excel. </strong></h2>
<p><img style="float:right;" src="http://static1.businessinsider.com/image/54b4786069bedda91b325046-1200-924/google-rajen-sheth.jpg" alt="Google Rajen Sheth" border="0">Excel blows Google Sheets out of the water in how much data it can handle and how it performs sophisticated financial analysis.</p>
<p>Singh doesn't care about that because, he says, only 10% of a company's employees need or care about that stuff.</p>
<p>Because Apps is hosted on Google's cloud, Google can see how people actually use productivity apps.</p>
<p>Note: Google PR tells us that this statistic comes from a company called <a href="http://media.wix.com/ugd/f2b43d_dd01ebd3fe364461ad357fbd6e35ca3f.pdf">Softwatch who offers a service that lets companies monitor their Apps usage</a> and not from Google's internal monitoring.</p>
<p>It turns out, that most people aren't even creating new documents or spreadsheets at all.</p>
<p>"Most people are reading and doing very light editing — our analysis has shown us that," he says. "If that’s the case, why would everyone always have to have Excel, etc.? You have lots of users and you don’t have to license them all for Excel or Office. That population of creators and content authors is 10% or less."</p>
<h2><strong>Step 3: Support Office documents as a "first-class citizen."</strong></h2>
<p>With Google's cloud storage service, Drive for Work, people can upload Office documents and when they open them, they automatically open in the appropriate editor in Google Apps on your desktop, phone or tablet. You do not need to install another app to open Office files.</p>
<p><span style="line-height: 1.5em;">They open in an Office-compatible editor, QuickOffice, which Google acquired a few years back. QuickOffice "will render [Office files] perfectly (or nearly perfectly) so you can do light editing and share it back, in native Office format," says Singh.</span></p>
<h2><strong>Step 4 (and this is the brilliant part): Don't try and convince enterprises to convert from Microsoft Office to Google Apps</strong>.</h2>
<p>Google knows there's very little chance that companies are going to wake up one day and throw Microsoft Office out completely. Instead, Google wants them to buy Apps <em>in addition</em> to the Office licenses they already have.</p>
<p>This may sound like doubling up. Why buy Apps if you already have Office?</p>
<p>But Singh believes the double-use will only happen for a short while. In the end, companies will stop buying new Office licenses for employees who don't really need it.&nbsp;</p>
<p>"So give people an option and overtime reconcile your associated licensing on actual usage, not just on some upfront commitment and some long-term contract. That’s the old world of enterprise software. Today you should just pay for what you actually use, not for some arbitrary number of users," Singh says.</p>
<p>That could actually save companies a lot of money.</p>
<p><img style="float:right;" src="http://static6.businessinsider.com/image/54d3cd556da811ba2f8b4567-988-741/google-apps-for-work.png" alt="Google Apps For Work" border="0">Google Apps for Work costs from $5/user/month to $10/user/month. (And Drive for Work costs $10/user/month, which includes Apps and unlimited storage.)</p>
<p>Although Microsoft offers plans for its cloud competitor, Office 365, that start at $8/user/month, the Google Apps fees are far lower than what an enterprise pays for traditional Office, when factoring the costs for computer servers, storage, Windows licenses, and so on.</p>
<p>This is pretty much what&nbsp;<a href="http://www.businessinsider.com/google-gets-huge-partner-to-sell-apps-2014-10">PriceWaterhouseCoopers did</a>&nbsp;<span style="line-height: 1.5em;">when it signed a landmark deal with Google to use Apps for 45,000</span><span style="line-height: 1.5em;"> of its 180,000 people worldwide, and to sell it to their clients.</span></p>
<p>That wasn't the biggest Apps deal Google ever signed, but it was significant in that it represents this new model — the roadmap for how Google will elbow its way it's way int Microsoft's world.</p>
<p>It took Google years to win the PwC deal.</p>
<p>"They did a multi-year [test], like any big company," Singh says. "It’s not just their data, it's their client data, as a consulting firm. For them to get comfortable on how we handle their data, security, it’s a symbol. Other clients have come to us and said, 'If they can do it, they are one of the most conservative brands in the world. We can do it.'"</p>
<p>PwC opted for Apps for roughly 25% of its employees. But when it comes to winning business from other enterprises, Singh wants more.</p>
<p>"I hope it's more like 80%. And the other way to think about it: People already own their Office licenses. You don’t have to give them up. Let the users choose. Using Google products for sharing or storage, they are just easier," he says.</p>
<h2><strong>Step 5</strong>: Teach them to become power users.</h2>
<h2><img style="float:right;" src="http://static1.businessinsider.com/image/54d3ceec69bedd19578b4570-925-694/google-apps-for-work-1.png" alt="Google Apps for Work" border="0"></h2>
<p>Unlike regular software, which you pay for up front, with cloud software, a software vendor has to continuously keep its customers happy or they'll end the subscription.</p>
<p>Google is constantly looking at how people are using Apps and trying to entice them to use it more.</p>
<p>As they grow dependent on say, real-time group editing in a document, they'll tell their coworkers.</p>
<p>Sometimes Google offers online training tips.</p>
<p>But it also created a community of power users to teach and do tutorials, the <a href="http://learn.googleapps.com/">Google Apps Learning Center</a>,</p>
<p>"And we’re going to expand that this year, where [customers] can come in and learn from each other and experts where they can be trained on new things coming out," Singh says.</p>
<p>This is another page from the Microsoft playbook. Microsoft's program is <a href="Most%20Valuable%20Professional%20Sign%20in">called the Microsoft Most Valuable Professional</a>. The Microsoft MVP designation is a prestigious accolade in certain professional IT circles.</p>
<h2><strong>Step 6: Get new customers hooked on products other than Apps.</strong></h2>
<p>Google Apps has been around for about a decade now, but there are still plenty of holdouts.</p>
<p>But Google has now built out several other enterprise-grade products.</p>
<p>In 2014, it expanded its cloud computing services to offer more of the things enterprises want. It's also got several video conferencing products and its original enterprise product, a search appliance. So it can use these newer products to get companies into Google's orbit, where it can then sell them Apps and other products.</p>
<p>"We have the portfolio," he says.</p>
<h2><strong>Step 7: Show them how Google's cloud helps mobile workers.</strong></h2>
<p>Singh thinks that mobile devices and apps will soon replace PCs altogether for a lot more employees.&nbsp;</p>
<p>"Consumers are mostly on their phones now. I think that will come to work," he predicts, which is why his team is making sure that Android is "a first-class citizen, secure, manageable, etc." for companies.</p>
<p><img style="float:right;" src="http://static3.businessinsider.com/image/52f3f750ecad04462f42bd1c-1099-824/chromebox-for-meetings-1.png" alt="Chromebox for meetings" border="0">When the tablet or phone is the primary computing device, "There will be a new generation of applications written for enterprise, which will be built on cloud, for mobile, which combine insights from different backend, legacy apps that people might have, but delivers it in intelligent fashion, as an assistant to you as you are working."</p>
<p>Sound familiar? That's the same mission Microsoft CEO Satya Nadella has laid out for Microsoft. <a href="http://www.businessinsider.com/satya-nadella-totally-changed-microsoft-2015-2">He calls it "reinventing productivity."</a></p>
<p>Google Now is the best example of what Google is doing here. But it plans to deliver more of those types of apps and services to enterprises "using the best of Google’s algorithms and computer science knowledge over the last 15 years,"&nbsp;Singh says.</p>
<p>He's more confident than ever that Google will succeed.</p>
<p>"I believe we’re ready for all of them, frankly, I would say both in the product and the readiness to support them, to help them in their transformation journey. All the pieces are now in place."</p>
<p>Google doesn't break out revenue for its At Work enterprise business. It's part of Google's "Other" segment, which generated almost $7 billion in revenue in 2014, and is Google's fastest-growing segment, growing 40% from 2013.&nbsp;</p>
<p>But "Other" also includes revenues from Google Play, the company's Android app and content store.&nbsp;<a href="http://tbri.com/analyst-perspectives/analyst-commentary/pgView.cfm?commentary=2215">Analysts at Technology Business Research expected</a> Google's enterprise business to generate $1.6 billion in revenues in 2014.</p>
<p>Here are some stats the company shared with us to show its growth:</p>
<ul>
<li>More than 5 million businesses use Google Apps, including regulated industries like finance (BBVA), healthcare (Roche), and aerospace/defense (Rockwell Collins), which means Google had to meet their stringent security and reliability standards.</li>
<li>There are more than 600 companies with more than 10,000 active Google Apps users.</li>
<li>50% of those who pay for Apps for work (as opposed to using the freebie versions) are located outside of the U.S.</li>
<li>Google's consumer and business file storage products, called Drive and Drive for Work, respectively, has been a huge home run. Today, 240M people are actively using Drive at home, school, and work, up from 190M at the end of June 2014.</li>
<li>More than 1,800 customers sign up for Drive for Work each week.</li>
<li>More than 40 million students, teachers, and administrators use Google Apps for Education, including 7 of the 8 Ivy League schools and the majority of the top 100 universities in the U.S.</li>
</ul><p><strong>READ THE FULL INTERVIEW:&nbsp;<a href="http://www.businessinsider.com/interview-google-amit-singh-2015-2" >Google's enterprise leader says they're ready to take on Microsoft</a></strong></p>
<p><a href="http://www.businessinsider.com/google-plan-to-beat-microsoft-office-2015-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/google-anti-microsoft-arsenal-2015-2Google is using a surprising number of weapons to take on Microsoft (GOOG, MSFT)http://www.businessinsider.com/google-anti-microsoft-arsenal-2015-2
Thu, 05 Feb 2015 19:47:00 -0500Julie Bort
<p><img style="float:right;" src="http://static6.businessinsider.com/image/520ec44decad04860f00001c-1200-800/168802505.jpg" border="0" alt="larry page google"></p><p>Google is the 800-pound Gorilla in search and online advertising, and about 90% of its revenue from ads.</p>
<p>But the company knows it can't be a one-trick pony forever.</p>
<p>“For many years they talked about how investments would be 70 percent in core search, 20 percent on things ancillary to search and 10 percent on moonshots,” Ben Schachter, an analyst with <a href="http://www.nytimes.com/2015/01/30/technology/google-earnings-revenue-squeezed-profit-misses-estimate.html?_r=0">Macquarie Securities told The New York Times</a>. “Now we’re pretty far from that. What does that mean for the company?”</p>
<p>While the income potential of those "moonshots" is still unknown (Google Glass, Google Fiber, driverless cars), Google actually has been systematically carving a considerable niche for itself in the enterprise tech business.</p>
<p>Companies spend about $4 trillion on technology worldwide and billions of that are suddenly being spent on cloud computing. And that's where Google plays.</p>
<p>Technology Business Research analyst Jillian Mirandi estimated that this<a href="http://tbri.com/analyst-perspectives/analyst-commentary/pgView.cfm?commentary=2215"> was a $1.6 billion for Google in 2014</a>. That may be tiny compared the $66 billion in 2014, but $1 billion+ business still isn't exactly peanuts.</p>
<p>According to Amit Singh, president of Google's enterprise unit, Google At Work, Google actually has a long list of products for the enterprise. Notice that all of them compete with products from its rival Microsoft.</p>
<p>They are:</p>
<ol>
<li><a href="https://www.google.com/work/search/products/gsa.html"><strong>Google Search for Work </strong></a>is also called the Google Search Appliance. Companies install can install the appliance, or use a Google search service to add search to their internal systems or websites. This was Google's first enterprise product.</li>
<li><a href="https://www.gmail.com/intl/en_us/mail/help/work.html"><strong>Gmail for Work </strong></a>is only offered as part the Google Apps suit, but it is one of the major reasons companies buy Apps and companies can customize it.</li>
<li><a href="https://www.google.com/work/apps/business/driveforwork/"><strong>Drive for Work</strong></a> is Google's unlimited cloud storage product, that competes with Microsoft OneDrive as well as Box and Dropbox.</li>
<li><strong><a href="https://www.google.com/work/apps/business/products/docs/">Docs</a> is a word processor</strong>, also part of Google Apps, that's known for its collaboration features.</li>
<li><strong>Videoconferencing</strong> is available as a cloud service called <a href="https://www.google.com/work/apps/business/products/hangouts/">Hangouts</a> or as a device called <a href="https://www.google.com/chrome/business/solutions/for-meetings.html">Chromebox for Meetings</a>. This competes with Microsoft's Skype and Lync for meetings, as well as expensive room based systems like Cisco's Telepresence.</li>
<li><a href="https://www.google.com/work/mapsearth/"><strong>Google Maps for Work </strong></a> is a service that allows developers to embed maps and GPS software into their apps. For instance, maps is embedded in Android Auto, which is how a car like Tesla provides GPS directions, and used by MapMyFITNESS. Microsoft offers a competing mapping service from Bing Maps.</li>
<li><strong><a href="http://www.google.com/chrome/business/browser/">Chrome for Work</a>,</strong> a version of Google's Chrome browser that IT professionals can easily manage for thousands of users.</li>
<li><strong>Chromebooks</strong> are cloud PCs that uss the ChromeOS operating system. <a href="http://www.google.com/chrome/business/devices/">Google has a Chromebooks for Work program</a>, which <a href="http://googleforwork.blogspot.com/2014/10/chromebooks-for-work-more-manageable.html">includes options of interest to businesses</a>. This program even offers apps that let you run Windows on a Chromebook (in geek speak, that's a "virtual desktop infrastructure" or VDI.)</li>
<li><a href="http://www.android.com/it/preview/"><strong>Android for Work</strong></a>, which is a special version of Android with extra security and features for businesses. It also includes specific version of Android like Android Auto, for car infotainment systems. This competes with Microsoft and Apple, and others.</li>
<li><strong><a href="https://cloud.google.com/">Google Cloud computing</a></strong>, "That’s a big thing," Singh jokes. Cloud consists of Google App Engine for writing and hosting apps, Google Compute Engine, which lets you rent computers and upload your own apps, Cloud Storage, for storing stuff related to your apps. On top of that are a ton of other apps databases, containers (the latest craze in app development), big data analysis apps and the like. Google's cloud competes with Microsoft's Azure and Amazon's Web Services.</li>
</ol>
<p>Although Google won't reveal revenue for any of these products, or for its enterprise unit at all, it sent us the following statistics to show off some of the growth Google At Work had in 2014:</p>
<ul>
<li>More than 60% of the Fortune 500 are actively using a paid Google for Work product (e.g. Apps, Clouds, Maps, Search, etc.)</li>
<li>Internally, Google hit its goal of 95% customer satisfaction (CSAT) for Google Apps customers, an improvement from 80% two years ago years ago and across all Google for Work products, the&nbsp;CSAT score is more than 90%.</li>
<li>Google Apps has ore than 5 million businesses customers.</li>
<li>More than 1,800 customers are signing up for Drive for Work each week</li>
<li>More than 40 million students, teachers and administrators use Google Apps for Education.</li>
<li>Google is winning cloud customers away from AWS, such as Atomic Fiction, dotCloud, and Just Develop IT (JDI).</li>
<li>Between all the apps hosted on App Engine, it serves 28 billion requests per day</li>
<li>Google's cloud database, Cloud Datastore, performs 6.3 trillion operations per month</li>
<li>At least 5 million Chromebooks were sold in 2014, accounting for about 1% of the PC market.</li>
</ul><p><a href="http://www.businessinsider.com/google-anti-microsoft-arsenal-2015-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/sap-founder-hasso-plattner-if-this-doesnt-work-were-dead-2015-2SAP founder Hasso Plattner: 'If this doesn’t work, we’re dead. Flat-out dead.' (SAP)http://www.businessinsider.com/sap-founder-hasso-plattner-if-this-doesnt-work-were-dead-2015-2
Wed, 04 Feb 2015 17:00:00 -0500Julie Bort
<p><img style="float:right;" src="http://static6.businessinsider.com/image/52feb003eab8ea64576dd915-935-701/hasso-plattner-1.png" alt="Hasso Plattner" border="0"></p><p>On Monday, German software company SAP <a href="http://www.news-sap.com/sap-unveils-next-generation-enterprise-software-new-business-suite-sap-s4hana/">released a new crop of products</a>, redesigned from the ground up to take advantage of its four-year-old database called HANA.</p>
<p>"If this doesn’t work, we’re dead. Flat-out dead. It’s that simple," SAPs charismatic 71-year-old founder and chairman Hasso Plattner <a href="http://recode.net/2015/02/04/sap-co-founder-plattner-bets-the-company-with-a-new-database/">told Re/Code's Arik Hesseldahl after the launch.</a></p>
<p>He's not exaggerating.</p>
<p>SAP is the biggest player in the financial software market, also known as "enterprise resource planning or ERP," which helps companies track everything from sales to raw materials.</p>
<p>Financial software is a conservative business and SAP is the epitome of a conservative company. The company, and its customers, don't like change.</p>
<p>But a new trend is coming that threatens even a stalwart like SAP: a form of cloud computing called software-as-a-service, where companies rent their apps, delivered as a service over a network, paid for on a subscription basis.</p>
<p>SaaS is an alternative to buying SAP software the old fashioned way: licensing the apps, then buying computer servers, building data centers, and installing it all. Such old-school SAP roll-outs could take years, cost millions, and are <a href="http://www.businessinsider.com/national-grid-sap-1-billion-upgrade-cost-2014-10">often fraught with cost overruns and other problems</a>.</p>
<p>Cloud companies are threatening to each SAP's lunch and are deliberately gunning for SAP's customers. Cloud competitors include Workday, Zuora, Netsuite, and, most especially, Oracle, who has also been relatively late to the cloud game, but is now coming on strong.</p>
<p>There's also a crop of startups selling new cloud financial analysis apps that work great on smartphones and tablets, like Anaplan and Tidemark. They are gunning for SAP too, <a href="http://www.businessinsider.com/anaplan-raises-100-million-2014-5">and growing really fast.</a></p>
<p>SAP has been buying its way into the cloud with big multi-billion acquisitions like SuccessFactors, Ariba, and Concur. But its attempts to write its own <a href="http://www.businessinsider.com/oops-looks-like-successfactors-embarassed-its-new-owner-sap-today-2012-5">cloud apps haven't done well.</a></p>
<p>Plattner admits as much, telling&nbsp;Hesseldahl, "You can say that our in-house development was not contributing enough."</p>
<p>SAP has spent the last few years concentrating on HANA, which it did develop in-house. HANA is a new breed of "in-memory" database designed to crunch huge amounts of data lickety-split.</p>
<p>Most of SAP's customers have traditionally used Oracle's database, but Oracle viciously competes with SAP and they are arch rivals. Given the amount of smack talk they toss at each other, the word "hate" might not be too strong.</p>
<p>So HANA is SAP's way of extracting its software, and its customers, away from Oracle and creating a much-needed new revenue stream. Plattner has staked SAP's future on HANA.</p>
<p>The new products announced on Monday, known as <a href="http://discover.sap.com/S4HANA">SAP S/4HANA</a>, can only be used with SAP's database HANA, although SAP will continue to support customers that use its software with Oracle's database, or other competitive databases. (It would have been suicide for SAP to do otherwise – enterprises do not lightly yank out their databases.) But there are special features customers can only get when using SAP's software with HANA.</p>
<p>These new products not only use HANA, but SAP changed them to be more touchscreen-friendly. And all of this software, including the database, can be run in the cloud, in a customer's data center, or some combination of the two. (The combo thing is known in geek speak as "hybrid computing.")</p>
<p>How well is SAP keeping the grim reaper at bay? <a href="http://global.sap.com/corporate-en/investors/newsandreports/news.epx?articleID=24021&amp;category=45">SAP says it now has</a> more than 5,800 HANA customers, and about 2,000 of them are using it with its its other apps.</p>
<p>That's good, but not good enough, Plattner says.</p>
<p>He tells Hesseldahl, "We have 2,000 systems sold, and I learned today that we have 270 more in production. If we only double that in 2015 I will be disappointed. That is a significant number, but I will be disappointed by it."</p>
<p><em>Correction: SAP PR tells us that <span style="color: black;">SAP S/4HANA</span> cannot be used with Oracle's database, but only with HANA. Customers that want to continue using Oracle or another database will not be able to use HANA. We apologize for the error.</em></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/25-startups-to-bet-your-career-on-2015-2015-2" >26 enterprise startups to bet your career on in 2015</a></strong></p>
<p><a href="http://www.businessinsider.com/sap-founder-hasso-plattner-if-this-doesnt-work-were-dead-2015-2#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="http://www.businessinsider.com/boys-asked-to-hit-a-girl-video-2015-1">What Happened When A Bunch Of Young Boys Were Told To Hit A Girl</a></p> http://www.businessinsider.com/new-relic-to-raise-100-million-in-ipo-2014-11New Relic Is The Next Big Enterprise IPOhttp://www.businessinsider.com/new-relic-to-raise-100-million-in-ipo-2014-11
Mon, 10 Nov 2014 21:30:57 -0500Jordan Novet
<p><img style="float:right;" src="http://static4.businessinsider.com/image/54617478eab8eaac79d10c4c-600-/new-relic-data-nerd-express-1.jpg" border="0" alt="new relic data nerd express" width="600"></p><p>Software analytics company&nbsp;<a href="http://newrelic.com/" target="_blank">New Relic</a>&nbsp;plans to raise as much as $100 million in an initial public offering (IPO).</p>
<p>New Relic&nbsp;<a href="http://newrelic.com/press-release/20141110" target="_blank">revealed the news</a>&nbsp;today in a public&nbsp;<a href="http://www.sec.gov/Archives/edgar/data/1448056/000119312514406260/d709327ds1.htm" target="_blank">S-1</a>&nbsp;filing with the U.S. Securities and Exchange Commission. The company plans to&nbsp;trade under the symbol NEWR, according to the filing.&nbsp;Morgan Stanley, J.P. Morgan Securities, Allen &amp; Co., and UBS Securities are underwriting the IPO.</p>
<p>Last year the San Francisco-based company expanded beyond&nbsp;application performance management (APM) software to focus on an area with&nbsp;potentially wider impact:&nbsp;analyzing how people use software. And in October,&nbsp;<a href="http://venturebeat.com/2014/10/08/new-relic-ducksboard/">New Relic announced it had acquired Ducksboard</a>,&nbsp;a provider of data-visualization software.</p>
<p>For the fiscal year that ended on March 31, 2014, New Relic registered a $40.2 million net loss on $63.2 million in revenue, the filing shows.</p>
<p>Earlier this year, the company announced a&nbsp;<a href="http://venturebeat.com/2014/04/28/new-relic-brings-in-more-cash-ahead-of-ipo/">$100 million funding round</a>&nbsp;and&nbsp;<a href="http://venturebeat.com/2014/02/21/new-relic-opens-ireland-office-as-the-software-company-drives-toward-an-ipo/">opened its first office outside the United States</a>.</p>
<p>In the domain where seven-year-old New Relic plays, competition abounds. Competitor AppDynamics is&nbsp;<a href="http://venturebeat.com/2014/06/02/appdynamics-debt/">looking toward the IPO route</a>. The filing discloses that New Relic will also contend with major enterprise software vendors, like BMC, Compuware, Riverbed, SAP, and New Relic founder and chief executive Lew Cirne’s former employer, CA. Back in 2006, CA bought Cirne’s previous startup, Wily.</p>
<p>Plus, other companies provide software to monitor web usage and thus represent competition for the recently released New Relic Insights software — namely Google (with Google Analytics) and Webtrends.</p>
<p>One interesting statistic from New Relic’s filing today: sales and marketing expenses came out to 92 percent of the company’s revenue for the fiscal year ending on March 31. Now, New Relic wants to focus more on winning big enterprise customers, according to the filing, so the sales and marketing spend will surely continue.</p><p><a href="http://www.businessinsider.com/new-relic-to-raise-100-million-in-ipo-2014-11#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/tim-cook-memo-apple-employees-ibm-2014-7Here's The Memo Apple CEO Tim Cook Sent To Employees About The New IBM Partnershiphttp://www.businessinsider.com/tim-cook-memo-apple-employees-ibm-2014-7
Tue, 15 Jul 2014 17:19:00 -0400Lisa Eadicicco
<p><img style="float:right;" src="http://static1.businessinsider.com/image/53c598e76bb3f7064b2bfcd5-800-/tim-cook-iphone-2.png" border="0" alt="Tim Cook iPhone" width="800" /></p><p>Apple just <a href="http://www.businessinsider.com/apple-ibm-enterprise-partnership-2014-7">announced a new partnership with IBM</a> that will bring its mobile devices into the enterprise space, and CEO Tim Cook just sent out an internal memo to employees elaborating on the news.</p>
<p>In the memo, which was <a href="http://9to5mac.com/2014/07/15/tim-cook-to-employees-on-ibm-partnership-im-really-excited-to-see-it-take-off-memo/">published by Mark Gurman of 9to5Mac</a>,&nbsp;Cook emphasizes how IBM's big data analytics and influence in the corporate world could open up large opportunities for Apple.</p>
<p>Through the partnership, IBM will be able to sell Apple's iPads and iPhones to its massive network of business customers. IBM will also develop cloud software for iOS, which could give Apple more of an edge when it comes to mobile productivity.</p>
<p>Here's Cook's memo in full:</p>
<p style="padding-left: 30px;">Team,</p>
<p style="padding-left: 30px;">Today, we announced a groundbreaking new partnership with IBM that will enable enterprises to put the power of big data analytics at their employees&lsquo; fingertips on their iOS device. This exclusive global partnership brings together Apple&lsquo;s legendary ease-of-use and integrated hardware and software with IBM&rsquo;s unmatched industry depth, enterprise software and expertise in big data analytics.</p>
<p style="padding-left: 30px;">It also builds on the incredible momentum in Apple&rsquo;s enterprise business. iPhone and iPad can be found in 98% of the Fortune 500. People love to use iOS devices and Apple delivers the things companies need most&mdash;security and scalable deployment along with a powerful platform for apps. With this announcement, we&rsquo;re now putting IBM&lsquo;s renowned big data analytics at iOS users&lsquo; fingertips, which opens up a large market opportunity for Apple. This is a radical step for enterprise and something only Apple and IBM can deliver.</p>
<p style="padding-left: 30px;">IBM is known for helping customers leverage big data and analytics to make their businesses run better. With over 100,000 consultants and sales professionals, they also have massive scale and global reach. IBM&lsquo;s sales and consulting teams will also be selling iPad, iPhone and AppleCare for Enterprise as part of the partnership.</p>
<p style="padding-left: 30px;">This partnership brings together the best of both companies. It&rsquo;s great news for Apple, IBM and for enterprise customers worldwide and I&rsquo;m really excited to see it take off.</p>
<p style="padding-left: 30px;">Tim</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/how-tim-cook-has-changed-apple-2014-5?op=1" >How Tim Cook Has Changed Apple</a></strong></p>
<p><a href="http://www.businessinsider.com/tim-cook-memo-apple-employees-ibm-2014-7#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/chart-of-the-day-apple-is-invading-the-enterprise-2014-7CHART OF THE DAY: Apple Is Invading The Enterprisehttp://www.businessinsider.com/chart-of-the-day-apple-is-invading-the-enterprise-2014-7
Thu, 03 Jul 2014 14:17:00 -0400Dave Smith
<p class="p1">The cloud and virtualization company <a href="https://blogs.vmware.com/euc/2014/06/apple-enterprise-invasion.html">VMware posted an interesting blog post</a> on Monday showing how Apple has been able to break into the enterprise: Simply, IT professionals have begun to prefer Macs to Windows PCs.</p>
<p class="p1">According to VMware&rsquo;s data charted for us by <a href="http://www.statista.com/">Statista</a>, 73% of IT administrators that preferred Macs said &ldquo;user preference&rdquo; was their main reason for choosing to work on OS X instead of Windows. As VMware points out, 66% of businesses already use Macs in the workplace because most people say the computers are easier to use, have better displays, and yes, &ldquo;coolness&rdquo; was also a factor.</p>
<p class="p1"><img src="http://static2.businessinsider.com/image/53b59b8beab8ea85527418ca-1200-900/2014_07_03_workplace.jpg" border="0" alt="2014_07_03_Workplace" /></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/chart-of-the-day-most-people-dont-use-more-than-30-apps-each-month-2014-7" >CHART OF THE DAY: Most People Don’t Use More Than 30 Apps Each Month</a></strong></p>
<p><a href="http://www.businessinsider.com/chart-of-the-day-apple-is-invading-the-enterprise-2014-7#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/modus-ceo-from-jobless-to-success-2014-4This Guy Was Fired And Sued By His Employer, So He Launched A Startup And Got Sweet Revengehttp://www.businessinsider.com/modus-ceo-from-jobless-to-success-2014-4
Mon, 28 Apr 2014 13:42:00 -0400Julie Bort
<p><img style="float:right;" src="http://static5.businessinsider.com/image/535ff512ecad043a716d5793-1200-924/abtin-buergari.jpg" border="0" alt="Abtin Buergari" /></p><p>Living well is the best revenge. No one personifies that better than Abtin Buergari, founder and CEO of Washington, D.C., startup, <a href="http://www.discovermodus.com/">Modus eDiscovery</a>.</p>
<p>This is the fantastic rags-to-riches story of a man who grew up in poverty and was working himself through law school until his ideas for doing his job better got him fired &mdash; and sued &mdash; by his employer.</p>
<p>So he took those ideas and started his own company, dropping out of college and living on credit cards.</p>
<p>Five years later, the company was generating $18 million in sales and landed $10 million in venture investment. It is now six years later, and he's commanding a 200-employee workforce with 12 offices.</p>
<p>Still, he describes the journey as "a very hard six years. Grueling. Going through moments of growth and through things that have taken me as far down and as far up as I could go," he says.</p>
<p>Here's how it all happened, he tells us:</p>
<p>Buergari was working as a paralegal while attending law school when he was recruited by a company that does what's known as "electronic discovery" or "eDiscovery." That's the process of digging through emails, instant messages and other online documents to find information that can be used in litigation.</p>
<p>He was working on a Hurricane Katrina lawsuit for a customer. (Katrina sparked an unprecedented series of lawsuits aimed at insurance companies and the federal government.) The customer, an attorney, requested Buergari uncover documents as quickly and as cost-effectively as possible. Buergari had some ideas for using technology to sift through documents faster and cheaper and asked his bosses if he could try those ideas.</p>
<p>They shushed him.</p>
<p>That's because eDiscovery is expensive for lawyers and lucrative for those supplying the document review services. The average legal department spends about $3 million per case for the discovery portion, <a href="http://www.abajournal.com/advertising/article/reducing_costs_with_advance_review_strategies/">law blog ABA Journal reports</a>. They didn't want their eDiscovery process to become faster and cheaper, Buergari says.</p>
<p>Buergari told them he could quit his job and become a consultant for his employer and tried to get them to let him try his ideas that way.</p>
<p>Bad move.</p>
<p>"I was not only fired, I was also sued," he said. His employer accused him of trying to steal their clients and their trade secrets.</p>
<p>Jobless, he quit law school. "I&rsquo;m a law-school dropout and a philosophy major. I&rsquo;m like the most unemployable person in the world," he laughs.</p>
<p>So he did the only thing he could think of to do: launched his own eDiscovery company.</p>
<p>Good move.</p>
<p>When one of his customers paid him a $1,250 retainer for his eDiscovery work, he knew he made the right choice.</p>
<p>"I still have the check. I never cashed it," he says. Then the checks grew from $1,000 to $10,000 and $100,000. "We&rsquo;ve got a couple of checks in the $1-million range, too" he says.</p>
<p>He created his own eDiscovery software and cloud-computing service where companies can store documents that need to be reviewed, a service he calls "hosted review."</p>
<p>Today, Modus has processed&nbsp;petabytes of data for some of the world's largest corporations and law firms.</p>
<p>Last year, Modus was named on <a href="http://www.inc.com/profile/modus-ediscovery">the Inc. 5000 list of fastest-growing companies</a> with $18 million in sales, up from $7.5 million the year before. He raised $10 million in venture funds that year, too.</p>
<p>All of this happened while being sued by his former employer, he says, which was confirmed by court documents.</p>
<p>But the tough times were a blessing in disguise, he says.</p>
<p>"When everything is hard ... you just have to stay strong. That's when you know you can be a leader that drives a company forward," he says.</p>
<p>The best part of his success is watching others succeed with him.</p>
<p>"I grew up in poverty. My mom worked two jobs so I was raised by my Grandma. I've now had the opportunity to send my sister to college, to help my parents, and I'm not worried about retirement," he laughs.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/what-its-like-to-work-for-paul-allen-2014-4" >This Is What It's Like To Work For Billionaire Microsoft Co-Founder Paul Allen (Absolutely Fantastic)</a></strong></p>
<p><a href="http://www.businessinsider.com/modus-ceo-from-jobless-to-success-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/heres-why-boxs-aaron-levie-is-a-genius-2014-4These Numbers Show That Box CEO Aaron Levie Is A Geniushttp://www.businessinsider.com/heres-why-boxs-aaron-levie-is-a-genius-2014-4
Wed, 16 Apr 2014 20:22:00 -0400Tien Tzuo
<p><img style="float:right;" src="http://static4.businessinsider.com/image/534f15626da811b145c19190-480-/aaron-levie-20.jpg" border="0" alt="Aaron Levie" width="480" /></p><p>When Box filed<a href="&lt;p%20dir=&quot;ltr&quot;&gt;"> its long-awaited paperwork</a> to become a public company, it caused a lot of talk about the financial health of the company, and the long-term viability of its business model.</p>
<p>At issue was how much money Box is spending compared to its revenue, particularly on sales and marketing. People began wondering: is founder and CEO Aaron Levie a quack or a modern-day genius?</p>
<p>Let me be clear: he&rsquo;s a genius, and he&rsquo;s not the only one.</p>
<p>I&rsquo;ve known Levie for six years, ever since Box became an early customer of my company, Zuora, and his company&rsquo;s revenues were in the low single digits. I&rsquo;ve watched with great pleasure as Levie, co-founder Dylan Smith and the team have grown Box into the force that it is today. He is the latest in a line of true entrepreneurs, laser-focused on making his vision of collaboration a reality. With over 34,000 paying companies across the globe including Bechtel, Eli Lilly, and Gap, it&rsquo;s obvious that companies see the value of Box and trust it to power their businesses.</p>
<p>But it&rsquo;s crazy to me that 10 years after the IPO of <a href="http://salesforce.com/">Salesforce.com</a> as the first public software-as-a-service (SaaS) company, Wall Street <em>still</em> doesn&rsquo;t understand the subscription business model. The software industry has been on an inevitable path to subscriptions since 1999, when Salesforce was founded.</p>
<p>Fast forward to today with Workday, Adobe, Box, Zendesk and others. These companies have proven that a subscription model with recurring revenue is a different kind of business. It&rsquo;s complex. Yet, when managed well, it's a healthy and financially attractive model that has disrupted some of the most established industries across the globe.</p>
<p>Even giant software vendors like SAP are now offering major products via subscription. And I assure you this is just the beginning.</p>
<p>Why then, is there such controversy about Box? <a href="http://www.forbes.com/sites/kurtmarko/2014/03/28/box-ipo-beginning-of-the-end-for-standalone-cloud-file-sharing/">Forbes</a> writer Kurt Marko recently questioned whether Box is a &ldquo;viable standalone business,&rdquo; pointing to that fact that operating expenses outweigh revenue and calling it &ldquo;the beginning of the end.&rdquo; Erik Sherman with<a href="http://www.cbsnews.com/news/box-plans-its-ipo-because-it-badly-needs-the-money/"> CBS News</a> claimed that Box &ldquo;badly needs the money&rdquo; and that &ldquo;an IPO is necessary to bring in the capital needed for long-term viability.&rdquo;</p>
<p>It&rsquo;s become apparent to me that there is a fundamental lack of understanding about the subscription business model, a term I call the &ldquo;Subscription Economy.&rdquo;</p>
<p>In order to understand the true genius of Box, let&rsquo;s look at the four big differences between the subscription model and a traditional software business.</p>
<p><strong>1. Subscription businesses care about a different revenue metric: ARR</strong></p>
<p>The first thing to know is that for a subscription business, revenue is not revenue. It&rsquo;s the difference between a one-time payment and recurring payments.</p>
<p>Just think about it &mdash; let&rsquo;s say you have two friends: Jack says he&rsquo;ll give you $10 just this once, and Jill says she&rsquo;ll give you $5 a year for each of the next 10 years. There is a big difference between the two &mdash; you know that Jill&rsquo;s deal is a better deal. &nbsp;</p>
<p>That&rsquo;s why smart subscription businesses look at something called ARR, which stands for Annual Recurring Revenue, and consists of only the subscription revenue from customers for an ongoing service. To get at ARR, subscription businesses take the value of their subscription contracts, normalize it to an annual amount, and add it all up. &nbsp;For a subscription business, more so than cash or revenue, ARR is the true indicator of your company&rsquo;s health.</p>
<p>But here&rsquo;s the thing: accounting rules today don&rsquo;t recognize ARR.</p>
<p>In fact, accounting systems do not differentiate between a dollar that recurs and a dollar that does not. Accounting systems today are built on the double entry standard created 500 years ago by <a href="http://en.wikipedia.org/wiki/Luca_Pacioli">Luca Pacioli</a> to help Venetian merchants track the sale of spices. And in that system, a dollar is a dollar is a dollar.</p>
<p>Fortunately, there&rsquo;s a simple way to approximate ARR from a standard income statement &mdash; just take the quarterly revenue, strip out non-recurring revenue such as setup fees or consulting fees, and multiply it by four.</p>
<p>That will give you a close estimate as to what the ARR was as the start of that quarter. &nbsp;(The sophisticated reader here will note that this doesn&rsquo;t tell you what ARR is at the end of the quarter, and it doesn&rsquo;t include revenue contributed from in-quarter bookings &hellip; but we&rsquo;ll leave that for another time).</p>
<p>In Workday&rsquo;s most recent filings, for example, the company reported $141 million in quarterly revenue, of which $110.7 million was subscription revenue. By taking the subscription revenue and multiplying it by four, you can see that Workday likely started out that quarter with about $443 million in ARR.</p>
<p>We&rsquo;ve performed the same calculations for Workday (ticker symbol WDAY) ServiceNow (NOW), NetSuite (N) and Salesforce.com (CRM), below.</p>
<div dir="ltr">
<table border="5"><colgroup><col width="184" /><col width="89" /><col width="93" /><col width="89" /><col width="100" /></colgroup>
<tbody>
<tr>
<td>&nbsp;</td>
<td>WDAY</td>
<td>NOW</td>
<td>N</td>
<td>CRM</td>
</tr>
<tr>
<td>Most recent quarterly ending</td>
<td>Jan 31 2014</td>
<td>Dec 31, 2013</td>
<td>Dec 31 2013</td>
<td>Jan 31 2014</td>
</tr>
<tr>
<td>Quarterly revenue</td>
<td>$141 million</td>
<td>$125 million</td>
<td>$115 million</td>
<td>$1,145 million</td>
</tr>
<tr>
<td>% professional services</td>
<td>22.0%</td>
<td>16.3%</td>
<td>18.6%</td>
<td>6.1%</td>
</tr>
<tr>
<td>Quarterly recurring revenue</td>
<td>$111 million</td>
<td>$105 million</td>
<td>$93 million</td>
<td>$1,075 million</td>
</tr>
<tr>
<td>ARR (estimated)</td>
<td>$443 million</td>
<td>$420 million</td>
<td>$374 million</td>
<td>$4,300 million</td>
</tr>
</tbody>
</table>
</div>
<p><br />Now how about Box? Unfortunately, Box doesn&rsquo;t actually break down how much of its revenue comes from subscription versus that which comes from professional services. We do know that professional services is less than 10% of the total revenue, otherwise it would need to present that separately from subscription revenue.</p>
<p>We&rsquo;ll make an educated guess that Box&rsquo;s consulting revenue is in-line with Salesforce.com&rsquo;s and plug in 5%. Based on that, we see that Box started its most recent quarter at $148 million ARR, double what they were at one year ago. &nbsp;That&rsquo;s pretty good growth.</p>
<div dir="ltr">
<table border="5"><colgroup><col width="184" /><col width="93" /><col width="89" /></colgroup>
<tbody>
<tr>
<td>&nbsp;</td>
<td>BOX</td>
<td>BOX</td>
</tr>
<tr>
<td>Most recent quarterly ending</td>
<td>Jan 31 2013</td>
<td>Jan 31 2014</td>
</tr>
<tr>
<td>Quarterly revenue</td>
<td>$19.6 million</td>
<td>$39 million</td>
</tr>
<tr>
<td>% professional services (**)</td>
<td>5%</td>
<td>5%</td>
</tr>
<tr>
<td>Quarterly recurring revenue</td>
<td>$18.7 million</td>
<td>$37 million</td>
</tr>
<tr>
<td>Starting ARR (estimated)</td>
<td>$75million</td>
<td>$148 million</td>
</tr>
</tbody>
</table>
</div>
<p>(**) Our guess</p>
<p><strong>2. Well what do you know, it turns out cloud storage is not that expensive</strong></p>
<p>One common refrain I&rsquo;ve heard from people is that Box&rsquo;s costs must be high, since they are storing all those files and have to purchase so many disks. And they must be losing money because they give so much of storage per user.</p>
<p>A look at Box&rsquo;s gross margins shows a different tale. &nbsp;</p>
<p>But first, let&rsquo;s do a quick Accounting 101 for the non-CPAs out there. In a SaaS company, there are really just three sources of costs: people, data center, and marketing. In the income statement, the part of Box&rsquo;s S-1 filing causing the most comments, these costs are allocated into four key buckets:</p>
<ol>
<li dir="ltr">Costs of revenue, otherwise known as costs of good sold, which is how much you need to spend to actually provide the service. &nbsp;In a SaaS company, this typically includes the data center, the hardware, the data center folks, customer support folks, etc.</li>
<li dir="ltr">Research and development, this includes all the developers and product managers.</li>
<li dir="ltr">General and administrative, this includes primarily the finance and HR folks.</li>
<li dir="ltr">Sales and marketing, this includes the sales and marketing departments and supporting personnel, and any money spent on marketing programs.</li>
</ol>
<p>Take a look at <a href="&lt;p%20dir=&quot;ltr&quot;&gt;">what Box says</a> goes into its costs of revenue:</p>
<p style="padding-left: 30px;">Our cost of revenue consists primarily of costs related to providing our cloud-based services to our paying customers, including employee compensation and related expenses for data center operations, customer support and professional services personnel, payments to outside infrastructure service providers, depreciation of servers and equipment, security services and other tools, as well as amortization of acquired technology.</p>
<p>Now, most folks will take these cost buckets and map that to revenue to get a margin. Revenue minus costs of revenue, for example, is your gross margin. &nbsp;We&rsquo;re going to do something different and compare these costs to ARR.</p>
<p>Why ARR? &nbsp;Think about it &mdash; the great thing about ARR is that it&rsquo;s a forward-looking metric &mdash; ARR very closely approximates what you expect to make this upcoming quarter, compared to revenue which tells you what you already made last quarter.</p>
<p>If you are Levie and Smith, and you know what your ARR is at the start of the quarter, you can make some smart decisions on how you want to spend that money. Comparing expenses to ARR better approximates how the executives in the company actually think and run their businesses.</p>
<p>To do this accurately, you have to take out the cost of goods sold that are tied to the professional services, and you have to take out the stock option expenses that are reported in the filings. That&rsquo;s why we call this a Gross Recurring Margin, vs. just a Gross Margin.</p>
<p>Here are the numbers we calculated:</p>
<div dir="ltr">
<table border="5"><colgroup><col width="216" /><col width="82" /><col width="83" /><col width="84" /><col width="82" /><col width="90" /></colgroup>
<tbody>
<tr>
<td>&nbsp;</td>
<td>BOX</td>
<td>WDAY</td>
<td>NOW</td>
<td>N</td>
<td>CRM</td>
</tr>
<tr>
<td>Most recent quarterly ending</td>
<td>Jan 31 2014</td>
<td>Jan 31 2014</td>
<td>Dec 31, 2013</td>
<td>Dec 31 2013</td>
<td>Jan 31 2014</td>
</tr>
<tr>
<td>Estimated ARR at the start of the quarter</td>
<td>$148 million</td>
<td>$443 million</td>
<td>$420 million</td>
<td>$374 million</td>
<td>$4,300 million</td>
</tr>
<tr>
<td>Costs of Sales (annualized)</td>
<td>$31 million</td>
<td>$76 million</td>
<td>$94 million</td>
<td>$55 million</td>
<td>$743 million</td>
</tr>
<tr>
<td>Gross Recurring Margin</td>
<td>79%</td>
<td>83%</td>
<td>78%</td>
<td>85%</td>
<td>85%</td>
</tr>
</tbody>
</table>
</div>
<p><br />As you can see, Box&rsquo;s gross margins are in line with others in the SaaS industry. &nbsp;It actually doesn&rsquo;t cost that much to offer storage in the cloud.</p>
<p><strong>3. Recurring Revenue Margin: The Real Story</strong></p>
<p>At the heart of financial accounting is the concept of matching. &nbsp;When $1 is shown on the income statement, it shows the amount of costs of goods sold, sales and marketing, R&amp;D and G&amp;A (general and administrative) that went into making that one dollar.</p>
<p>Unfortunately, the whole concept of matching starts to break down for subscription business models. That's because ARR represents revenue acquired in previous periods, which are simply now renewing. &nbsp;Sure, you need to service the customer, so cost of goods and G&amp;A is to service the customer and does match to the ARR. &nbsp;</p>
<p>How about R&amp;D? &nbsp;Well, the traditional view says the products you are selling today are already done, and you are investing in research to create innovations that drive future sales. But here&rsquo;s the thing -- the customers of SaaS companies did not sign up for a static service that never gets better. If you know something about SaaS companies, they are obsessed about keeping their customers happy, to keep them buying the service, and they invest in R&amp;D against that goal.</p>
<p>At Salesforce, we started naming releases with the seasons, for example the &ldquo;Winter 2013 release,&rdquo; to convey the constant rate we expected to add enhancements to the products. That&rsquo;s why I like to think of R&amp;D as being matched to ARR.</p>
<p>Sales and marketing is where it gets interesting. If your ARR represents today&rsquo;s revenue that you expect to recur, then your spend on sales &amp; marketing is going towards growing ARR, to acquiring future revenue that is not yet in ARR. In other words, today&rsquo;s sales and marketing expenses are matched to future revenue. &nbsp;</p>
<p>(In accounting lingo, sales and marketing acts more like a &ldquo;capital expenditure&rdquo;, or capex for short. In the old manufacturing world, you invested in a big factory to build a bunch of widgets, and you spread the cost of that factory out over time as you made and sold those widgets over time. That would be depreciation of course. In the subscription economy, you invest in sales &amp; marketing to acquire customers, and you recognize revenue from those customers over their lifetime, which often can be 3, 5, 10 years or more. However, accounting rules today do not let you spread or depreciate sales and marketing costs over time.)</p>
<p>That&rsquo;s why we like to look at something we call Recurring Revenue Margin, which is your ARR minus your cost of sales, research and development, and G&amp;A, but before the spend on sales and marketing. &nbsp;</p>
<div dir="ltr">
<table border="5"><colgroup><col width="184" /><col width="84" /><col width="87" /><col width="89" /><col width="87" /><col width="93" /></colgroup>
<tbody>
<tr>
<td>&nbsp;</td>
<td>BOX</td>
<td>WDAY</td>
<td>NOW</td>
<td>N</td>
<td>CRM</td>
</tr>
<tr>
<td>Most recent quarter ending</td>
<td>Jan 31 2014</td>
<td>Jan 31 2014</td>
<td>Dec 31, 2013</td>
<td>Dec 31 2013</td>
<td>Jan 31 2014</td>
</tr>
<tr>
<td>Estimated ARR at the start of the quarter</td>
<td>$148 million</td>
<td>$443 million</td>
<td>$420 million</td>
<td>$374 million</td>
<td>$4,300 million</td>
</tr>
<tr>
<td>Costs of Sales *</td>
<td>$31 million</td>
<td>$76 million</td>
<td>$94 million</td>
<td>$55 million</td>
<td>$743 million</td>
</tr>
<tr>
<td>Research &amp; Development *</td>
<td>$51 million</td>
<td>$184 million</td>
<td>$75 million</td>
<td>$73 million</td>
<td>$576 million</td>
</tr>
<tr>
<td>General &amp; Administrative *</td>
<td>$36 million</td>
<td>$59 million</td>
<td>$53 million</td>
<td>$40 million</td>
<td>$549 million</td>
</tr>
<tr>
<td>Recurring Revenue Margin</td>
<td>20%</td>
<td>28%</td>
<td>47%</td>
<td>55%</td>
<td>57%</td>
</tr>
</tbody>
</table>
</div>
<p>* Quarterly numbers annualized</p>
<p>When you look at Box&rsquo;s business from a recurring revenue margin viewpoint, you see they are running a profitable business. If Box stopped all sales and marketing today, it wouldn&rsquo;t grow any more, but it would have an intrinsic 20% margin business. Now, Box isn&rsquo;t as profitable as Salesforce or Netsuite, yet, but when you look at Box&rsquo;s recurring revenue margin over the last four quarters (below), the trend isn&rsquo;t bad. &nbsp;</p>
<div dir="ltr">
<table border="5"><colgroup><col width="207" /><col width="105" /><col width="108" /><col width="112" /><col width="92" /></colgroup>
<tbody>
<tr>
<td>&nbsp;</td>
<td>BOX</td>
<td>BOX</td>
<td>BOX</td>
<td>BOX</td>
</tr>
<tr>
<td>Quarter ending</td>
<td>Apr 30 2013</td>
<td>Jul 31 2013</td>
<td>Oct 31 2013</td>
<td>Jan 31 2014</td>
</tr>
<tr>
<td>Estimated ARR at the start of the quarter</td>
<td>$89 million</td>
<td>$108 million</td>
<td>$128 million</td>
<td>$148 million</td>
</tr>
<tr>
<td>Costs of Sales</td>
<td>$17 million</td>
<td>$22 million</td>
<td>$27 million</td>
<td>$31 million</td>
</tr>
<tr>
<td>Research &amp; Development</td>
<td>$35 million</td>
<td>$41 million</td>
<td>$45 million</td>
<td>$51 million</td>
</tr>
<tr>
<td>General &amp; Administrative</td>
<td>$30 million</td>
<td>$33 million</td>
<td>$35 million</td>
<td>$36 million</td>
</tr>
<tr>
<td>Recurring Revenue Margin</td>
<td>8%</td>
<td>11%</td>
<td>16%</td>
<td>20%</td>
</tr>
</tbody>
</table>
</div>
<p><br />You can see that Box and Workday are spending in research &amp; development. &nbsp;Why is R&amp;D spending so high? &nbsp;I would speculate that this is&nbsp;Levie betting on the future --&nbsp;Levie likely believes he has a big market that is growing fast, and he needs to invest in R&amp;D with more features to outpace Dropbox or Microsoft's SharePoint product.</p>
<p><strong>4. The Genius of Going for Growth</strong></p>
<p>So what have we established so far?&nbsp; Subscription businesses really care about recurring revenue, which is measured by ARR.&nbsp; On an ARR basis, Box is a fast-growing SaaS companies today. On a gross margin basis, it doesn&rsquo;t cost Box too much to offer storage in the cloud, and on a recurring revenue margin basis, Box is building an inherently profitable business.</p>
<p>The last thing to look at is where all the controversy lies. On <a href="http://tomtunguz.com/box-ipo/">his blog</a>, Tomasz Tunguz notes that:</p>
<p style="padding-left: 30px;">Box spends about 137% of their revenue on sales and marketing. This sales and marketing expense figure is 3x the average of 42% of revenue found across all other publicly traded SaaS companies at this point in their lifecycle. The next closest comparable is Cornerstone-on-Demand which spent 86% of revenue dollars for sales and marketing. Of the remaining 18 companies in the data set, no other firm exceeded 62%.</p>
<p>Let&rsquo;s take that again. Box is spending more money on sales and marketing than it has revenues, 3 times more than its peer group, and over 50% more than the #2 spendthrift on the list. &nbsp;I see the Box billboard every day when I drive down Highway 101. So what is Levie getting for all that money? &nbsp;Let&rsquo;s take a look.</p>
<div dir="ltr">
<table border="5"><colgroup><col width="184" /><col width="84" /><col width="87" /><col width="89" /><col width="87" /><col width="93" /></colgroup>
<tbody>
<tr>
<td>&nbsp;</td>
<td>BOX</td>
<td>WDAY</td>
<td>NOW</td>
<td>N</td>
<td>CRM</td>
</tr>
<tr>
<td>Quarter ending</td>
<td>Oct 31 2013</td>
<td>Oct 31 2013</td>
<td>Sep 30 2013</td>
<td>Sep 30 2013</td>
<td>Oct 31 2013</td>
</tr>
<tr>
<td>Estimated ARR at the start of the quarter</td>
<td>$128 million</td>
<td>$399 million</td>
<td>$372 million</td>
<td>$343 million</td>
<td>$4,018 million</td>
</tr>
<tr>
<td>Estimated ARR at the end of the quarter</td>
<td>$148 million</td>
<td>$443 million</td>
<td>$420 million</td>
<td>$374 million</td>
<td>$4,300 million</td>
</tr>
<tr>
<td>ARR Growth</td>
<td>$20 million</td>
<td>$44 million</td>
<td>$48 million</td>
<td>$31 million</td>
<td>$282 million</td>
</tr>
<tr>
<td>Sales &amp; Marketing Spend</td>
<td>$46 million</td>
<td>$56 million</td>
<td>$50 million</td>
<td>$50 million</td>
<td>$570 million</td>
</tr>
</tbody>
</table>
</div>
<p>In the quarter ending Oct. 31, 2013, Box spent $46 million in sales and marketing to grow ARR by $20 million, net of churn. That means he spent over $2 to acquire $1 of growth. &nbsp;Compared to other public SaaS companies, that&rsquo;s on the high side, although if Box expects that $1 to recur for the next 5 or 10 years, that&rsquo;s still a pretty good deal.</p>
<p>Has Levie built a house of cards, one that requires more and more money to fuel, but that ultimately will fall apart when the music stops? &nbsp;</p>
<p>I don&rsquo;t think so. I see a person who, by the age of 28, has convinced some pretty big names in the investment community to give him over $400 million dollars to go after a once-in-a-lifetime opportunity.</p>
<p>That&rsquo;s pretty amazing in and of itself. But that&rsquo;s not all. Levie then built a business with strong fundamentals that is intrinsically profitable, if looked at in the right way.</p>
<p>Finally, by recognizing that he&rsquo;s in a land grab in a fast growing market with multiple players, Levie is showing he has the courage to bet big and spend big to acquire as many customers as he can.</p>
<p>What if one day Levie decides that he&rsquo;s won, that he sees the market for cloud collaboration slowing, and he&rsquo;s the clear market share leader? At that point, if he cuts R&amp;D back down to 15%, and sales and marketing down to 15%, he&rsquo;ll have a 25% margin business. &nbsp;If he&rsquo;s a $1 billion company at that point, that means he can throw off $250 million in cash.</p>
<p>If he can grow that into a $10 billion company, he&rsquo;s throwing off $2.5 billion in cash. That&rsquo;s a great business. And that&rsquo;s the genius of Aaron Levie.</p>
<p><em>Tien Tzuo is the founder and CEO of <a href="http://www.zuora.com">Zuora</a>, a cloud service founded in 2007 that provides accounting and billing services for other cloud computing companies. Before Zuora, Tzuo spent 9 years at Salesforce.com where he was employee No. 11 and its former Chief Strategy Officer.</em></p>
<div style="position: absolute; top: -1999px; left: -1988px;" id="stcpDiv">Zuora</div><p><a href="http://www.businessinsider.com/heres-why-boxs-aaron-levie-is-a-genius-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/atlassian-helps-employees-pocket-150m-2014-4Atlassian, Now Worth $3.3 Billion, Is Helping Employees Pocket $150 Million http://www.businessinsider.com/atlassian-helps-employees-pocket-150m-2014-4
Tue, 08 Apr 2014 21:34:00 -0400Julie Bort
<p><img style="float:right;" src="http://static2.businessinsider.com/image/53447f0a69bedd3614d99213-480-/atlassian-co-founder-scott-farquhar.jpg" border="0" alt="Atlassian co-founder Scott Farquhar" width="480" /></p><p>While the tech world wrings its hands over&nbsp; how much <a href="http://www.businessinsider.com/box-ipo-analysis-2014-3">money an IPO-bound tech company can lose</a> in the name of sales and marketing, enterprise software company Atlassian has grown into a profitable <a href="http://www.reuters.com/article/2014/04/08/venture-funding-atlassian-idUSL2N0N019I20140408">company valued at $3.3 billion.</a>&nbsp;</p>
<p>Now it is helping its 800 employees cash out $150 million worth of their equity.</p>
<p>Without any sales people.</p>
<p>That's right, its 35,000+ customers (mostly IT people) in 130 countries (including most of the Fortune 100), buy Atlassian's software on a self-service model. They head to the website, sign up for the cloud service or download the software, and away they go, Atlassian President Jay Simons told Business Insider.</p>
<p>The Sydney, Australia-based company, which makes project management software and chat tools, is on track to hit over $200 million in revenue and has been cash flow positive for 10 years, it says.</p>
<p>Atlassian also has 350 partners worldwide and 1,500 apps in its Atlassian Marketplace that has generated more than $20 million for its app developers, it says. Plus, it's donated 1% of its equity, $3 million to date, to an African education charity called <a href="http://www.roomtoread.org/">Room to Read.</a></p>
<p>The company has US offices in San Francisco and Austin. Its success has made its two young co-founders two of the richest people in that country, <a href="http://www.businessinsider.com/atlassian-cofounder-scott-farquhar-2012-11">the Mark Zuckerbergs of Australia. </a></p>
<p>Like Zuck, its co-founders, Mike Cannon-Brookes and Scott Farquhar, dropped out of college to start their company, using a $10,000 credit card to found it in 2002.</p>
<p>Flash forward 12 years. This month Atlassian will share the wealth with its workers. It agreed to a secondary offering where current and former employees can sell $150 million worth of shares. Mutual-fund giant T. Rowe Price is the one mostly buying, the company says. The deal should be completed by mid-April, and it gives Atlassian a $3.3 billion valuation, <a href="http://www.reuters.com/article/2014/04/08/venture-funding-atlassian-idUSL2N0N019I20140408">Reuters reports.</a></p>
<p>"It gives my co-founder and me great pleasure to offer past and current employees of Atlassian the opportunity for some liquidity at this point in the company's growth," Scott Farquhar, co-CEO and co-founder of Atlassian, said in a written statement emailed to Business Insider.</p>
<p>Atlassian is <a href="http://www.businessinsider.com/hottest-pre-ipo-enterprise-startups-2014-2">expected to start its own IPO journey soon</a>, perhaps later this year. Farquhar confirmed to Business Insider that he and Cannon-Brookes dream of running a big public company one day.</p>
<p>The one thing they still have no plans to do: hire salespeople.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/new-successful-college-dropouts-2014-3" >Oculus founder Palmer Luckey dropped out of college — and so did all these other tech superstars</a></strong></p>
<p><a href="http://www.businessinsider.com/atlassian-helps-employees-pocket-150m-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/today-is-the-end-of-an-era-for-microsoft-windows-xp-is-officially-put-out-to-pasture-2014-4Today Is The End Of An Era For Microsoft: Windows XP Is Officially Put Out To Pasture (MSFT)http://www.businessinsider.com/today-is-the-end-of-an-era-for-microsoft-windows-xp-is-officially-put-out-to-pasture-2014-4
Tue, 08 Apr 2014 12:21:40 -0400Julie Bort
<p><img style="float:right;" src="http://static2.businessinsider.com/image/534417406bb3f7ee590aca51-1200-924/bill-gates-windows-xp.jpg" border="0" alt="Bill Gates Windows XP" /></p><p>As of today, Microsoft has finally, <a href="https://www.microsoft.com/en-us/windows/enterprise/end-of-support.aspx">officially pulled the plug on Windows XP</a>, the most popular version of Windows ever, launched more than 12 years ago.</p>
<p>Many security vendors are treating this day as if it were some kind of PC Armageddon.&nbsp;</p>
<p>"After today, there are no more security updates coming for Windows XP. EVER. And after today, NO ONE should be running Windows XP. ... make no mistake, you are now running a dangerous system and should get off of it as quickly as you can," security vendor <a href="http://blog.trendmicro.com/windows-xp-is-gone/">Trend Microsoft wrote in a blog post.</a></p>
<p>The truth is, all XP PCs will continue to boot up and operate from this day forward, just like they always have. They will just do that without Microsoft's official support. That means that Microsoft will not fix bugs, add features, or&nbsp;&mdash; most importantly&nbsp;&mdash; patch newly found security holes.</p>
<p>Sort of. (More on that in a minute ...)</p>
<p>Because XP was the most popular operating system, it's also the biggest target for hackers, who have found thousands of bugs in it over the years, the most serious of which Microsoft fixed. Those bugs will stay fixed.</p>
<p>But security vendors warn that hackers will double-down on finding new bugs in XP.</p>
<p>Microsoft gave its customers plenty of warning. It told folks it would pull the plug on XP support today years ago.</p>
<p>The problem is that many, many companies are still using XP, for a variety of reasons. Lots of them are using software for their businesses that won't work on newer versions of Windows.</p>
<p>All told, almost one-third of PCs on the Internet, some 28%, are still using XP, according to <a href="http://www.netmarketshare.com/operating-system-market-share.aspx?qprid=11&amp;qpcustomb=0">OS watchdog site Net Applications. </a></p>
<p>And some 44% of businesses are still using it, according to mobile device management company Fiberlink.</p>
<p>That's why Microsoft is only sort of really pulling the plug.</p>
<p>For instance, the Dutch and British governments have both signed multimillion deals with Microsoft to get ongoing patches for XP for them, under Microsoft&rsquo;s Custom Support program, <a href="http://arstechnica.com/information-technology/2014/04/not-dead-yet-dutch-british-governments-pay-to-keep-windows-xp-alive/">reports Ars Technica.</a></p>
<p>Banks using XP ATMs are reportedly negotiating a similar deal with Microsoft, <a href="http://www.reuters.com/article/2014/03/14/us-banks-atms-idUSBREA2D13D20140314">reports Reuters.</a></p>
<p>Plus, Microsoft has agreed to continue warning everyone when it finds a virus on their XP PC, through&nbsp;July 14, 2015, <a href="http://blogs.technet.com/b/mmpc/archive/2014/01/15/microsoft-antimalware-support-for-windows-xp.aspx">it said</a>. So if you use antivirus software, it will still work as a warning system, even though Microsoft is not promising to fix any new bugs that hackers find.</p>
<p>But the upshot is, if you're still using XP on an old home computer, be aware that it will soon be the target of hackers. If you are still using XP on your business computers, it really is time to get yourself to Windows 7 or Windows 8.</p><p><a href="http://www.businessinsider.com/today-is-the-end-of-an-era-for-microsoft-windows-xp-is-officially-put-out-to-pasture-2014-4#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/ibm-to-spend-1b-on-software-cloud-2014-2IBM CEO Ginni Rometty Vows To Spend Another $1 Billion On IBM's Cloud Computing Business (IBM)http://www.businessinsider.com/ibm-to-spend-1b-on-software-cloud-2014-2
Mon, 24 Feb 2014 17:18:40 -0500Julie Bort
<p><img style="float:right;" src="http://static3.businessinsider.com/image/530bbb5269bedd2c2ea95fd9-480-/ibm-ginni-rometty-2.jpg" border="0" alt="IBM Ginni Rometty" width="480" /></p><p>Software is the lifeblood of IBM but CEO Ginni Rometty is ready to turn that business on its head to own the up-and-coming cloud computing market.</p>
<p>Not that she has a lot of choice.</p>
<p>On Monday, <a href="http://www-03.ibm.com/press/us/en/pressrelease/43258.wss">the company committed to spending $1 billion</a> to put its entire, huge software portfolio into the cloud, so that enterprises can buy that software as a service for a monthly fee, hosted on IBM's cloud.</p>
<p>Previously, enterprises bought software in multi-year licenses and installed it on their own computers in their own data centers.</p>
<p>But cloud computing is changing how companies buy information technology, so it has to change how software companies sell it.</p>
<p>For Rometty, this transition is akin to the ones made by her predecessors like Lou Gerstner, who created IBM's huge IT consulting business, or Sam Palmisano, who sold IBM's PC business to concentrate on software.</p>
<p>Those plans worked: As of 2013, software was IBM's second largest business and far and away the most profitable. It generated $25.9 billion out of the company's $99.8 billion in revenues, with margins of 89 percent compared to 48.6 percent for IBM overall, points out <a href="http://bits.blogs.nytimes.com/2014/02/24/ibm-more-cloud-less-people/?_php=true&amp;_type=blogs&amp;_r=0">the New York Times' Quentin Hardy</a>.</p>
<p>Software is also the key to IBM's $18.4 billion services business (at 31% margins), as customers hire IBM to help them with everything from installing it to troubleshooting it.</p>
<p>Now, none of that matters.</p>
<p>As companies shift from buying tech to renting it, IBM has found its revenues shrinking. Its 2013 was so soft, Rometty and her top <a href="http://www.businessinsider.com/ibm-revenue-miss-means-no-bonuses-2014-1">execs didn't take their 2013 bonuses.</a></p>
<p>She needs cloud computing to lead IBM back to growth and she's investing like crazy to make it so. In addition to this $1 billion, she's made numerous acquisitions. She will also <a href="http://www.businessinsider.com/ibm-to-invest-1-billion-in-watson-2014-1">spend $1 billion to turn IBM's super-smart Watson technology</a> into a cloud service, and will <a href="http://www.businessinsider.com/ibm-cloud-expansion-2014-1">another $1.2 billion to build up to 15 new data centers</a> across five continents.</p>
<p>She has her work cut out for her. Major competitor <a href="http://www.businessinsider.com/amazon-cloud-beats-ibm-microsoft-google-2013-11">Amazon is still the 800-pound cloud computing gorilla, according to market researchers.</a></p>
<p>Plus every other tech firm, from traditional cloud players like Salesforce.com, to companies like Microsoft, Google, HP and Oracle, are in the cloud market these days, too.</p><p><a href="http://www.businessinsider.com/ibm-to-spend-1b-on-software-cloud-2014-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/nadella-best-lesson-from-steve-ballmer-2014-2Microsoft's New CEO Satya Nadella: 2 Lessons I Learned From Steve Ballmer (MSFT)http://www.businessinsider.com/nadella-best-lesson-from-steve-ballmer-2014-2
Thu, 20 Feb 2014 13:26:23 -0500Julie Bort
<p><img style="float:right;" src="http://static4.businessinsider.com/image/52f198e26bb3f7276e36a7d1-480-/satya-nadella-13.jpg" border="0" alt="Satya Nadella" width="480" /></p><p>Success versus failure. It's a topic that's clearly weighing heavily on the mind of Microsoft's new CEO Satya Nadella.</p>
<p>Microsoft's previous CEO, Steve Ballmer, led the company into <a href="http://www.businessinsider.com/microsoft-earnings-2014-1">unprecedented revenues and profits</a>. But that wasn't enough. He also <a href="http://www.businessinsider.com/steve-ballmers-most-epic-mistakes-as-ceo-of-microsoft-2013-8">made a number of missteps</a> which caused him to retire from the job years before he planned.</p>
<p>Nadella takes over a huge and successful company with a lot of issues that need fixing from its culture to <a href="http://www.businessinsider.com/smartphones-versus-pcs-2013-8">its position in mobile.</a></p>
<p>In an interview <a href="http://www.nytimes.com/2014/02/21/business/satya-nadella-chief-of-microsoft-on-his-new-role.html">with the New York Times Adam Bryant</a>, Nadella said Ballmer taught him two things: 1) He should never compare himself to others, and 2) he never needs to ask how he's doing. If he's not doing a good job, he'll know.</p>
<p>Here's what Nadella said.</p>
<p style="padding-left: 30px;">"I remember asking [Ballmer]: &ldquo;What do you think? How am I doing?&rdquo; Then he said: &ldquo;Look, you will know it, I will know it, and it will be in the air. So you don&rsquo;t have to ask me, &lsquo;How am I doing?&rsquo; At your level, it&rsquo;s going to be fairly implicit.&rdquo;</p>
<p style="padding-left: 30px;">I went on to ask him, &ldquo;How do I compare to the people who had my role before me?&rdquo; And Steve said: &ldquo;Who cares? The context is so different. The only thing that matters to me is what you do with the cards you&rsquo;ve been dealt now. ...&nbsp; The lesson was that you have to stay grounded, and to be brutally honest with yourself on where you stand."</p><p><a href="http://www.businessinsider.com/nadella-best-lesson-from-steve-ballmer-2014-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/hp-and-autonomy-fight-gets-uglier-2014-2The Fight Between HP And Autonomy Over Alleged Fraud Gets Uglier (HPQ)http://www.businessinsider.com/hp-and-autonomy-fight-gets-uglier-2014-2
Tue, 18 Feb 2014 13:49:41 -0500Julie Bort
<p><img style="float:right;" src="http://static1.businessinsider.com/image/52eff6d66da811a1283e1f5e-480-/meg-whitman-47.jpg" border="0" alt="Meg Whitman" width="480" /></p><p>A new report <a href="http://www.ft.com/intl/cms/s/0/4b0e6140-97d3-11e3-8dc3-00144feab7de.html#slide0">by the Financial Times </a>brings into question exactly what HP knew about Autonomy's books and when.</p>
<p>To recap: less than a year after buying British software maker Autonomy for $11 billion, <a href="http://www.businessinsider.com/meg-whitman-hp-autonomy-blame-2012-11">HP wrote off $8.8 billion</a> and alleged that Autonomy had improperly inflated its revenues and margins, to the tune of $5 billion. HP called it fraud, <a href="http://www.businessinsider.com/autonomy-accounting-fraud-allegations-explainer-2012-11">named a whole bunch of ways it believed</a> Autonomy had done this, and asked for investigations by the authorities.</p>
<p>HP said it discovered problems <a href="http://www.businessinsider.com/mike-lynch-hp-autonomy-mismanagement-2012-11">when a whistleblower came forward in May 2012.</a> It publicly disclosed this information when it announced the write-off in November 2012.</p>
<p>The <a href="http://www.ft.com/cms/s/0/4b0e6140-97d3-11e3-8dc3-00144feab7de.html#ixzz2th95DlNw">Financial Times report</a> goes into depth over several Autonomy deals said to be at <a href="http://www.ft.com/intl/cms/s/0/4b0e6140-97d3-11e3-8dc3-00144feab7de.html#slide0">the heart of the scandal, </a>and shows that HP might have known something about some of them months before the whistleblower came forward.</p>
<p>Autonomy founder Mike Lynch has vehemently denied all charges and says that HP's <a href="http://www.businessinsider.com/autonomys-mike-lynch-i-still-own-hp-stock-and-demand-hps-board-answer-questions-2013-3">own mismanagement after the sale was the real problem.</a></p>
<p>Specifically, HP said one of the problems it discovered was that Autonomy was selling hardware at a loss and accounting for that as a sales-and-marketing expense. HP indicated that this <a href="http://www.businessinsider.com/autonomy-accounting-fraud-allegations-explainer-2012-11">made Autonomy look like it </a>had higher profit margins than it did.</p>
<p>FT uncovered emails from HP executives months before the whistleblower came forward that allegedly show HP knew that Autonomy was selling hardware.</p>
<p>Here is HP's official statement regarding the emails, in which it denies knowing anything before the whistleblower:</p>
<p style="padding-left: 30px;">While HP eventually learned that a portion of Autonomy&rsquo;s revenues were related to hardware sales, we knew nothing of the accounting improprieties, misrepresentations and disclosure failures related to such sales until after a senior Autonomy executive came forward and HP conducted an extensive investigation.</p>
<p>Mike Lynch has <a href="http://autonomyaccounts.org/statement-regarding-hps-changing-position-on-hardware-sales/">written a long response on his blog</a>. Here's a bite of that:</p>
<p style="padding-left: 30px;">The FT revelations now show that HP and its senior management were well aware of Autonomy&rsquo;s hardware sales and its legitimate practice of sometimes selling hardware as a loss leader, and that all of these sales had been fully disclosed to Deloitte and appropriately reviewed and treated.</p>
<p>The Autonomy acquisition has been a major ordeal for HP.&nbsp; So far, the CEO who orchestrated it, <a href="http://www.businessinsider.com/shane-robison-hp-autonomy-2012-11">Leo Apotheker, left the company, as did another top HP exec.</a> Plus <a href="http://www.businessinsider.com/hp-board-vote-2013-3">two board members resigned,</a> and HP's previous <a href="http://www.businessinsider.com/hps-chairman-ray-lane-steps-down-2013-4">chairman of the board, Ray Lane, stepped down from that role</a> but retained his board seat.</p>
<p>Various regulatory agencies in the U.S. and U.K. are investigating.</p><p><a href="http://www.businessinsider.com/hp-and-autonomy-fight-gets-uglier-2014-2#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/microsoft-board-bill-gates-2014-1Kicking Bill Gates Off The Board Is The Best Thing Microsoft Can Do (MSFT)http://www.businessinsider.com/microsoft-board-bill-gates-2014-1
Fri, 31 Jan 2014 18:19:00 -0500Julie Bort
<p><img src="http://static3.businessinsider.com/image/52ec22a46da8115a19f357b3-800-/bill-gates-71.jpg" border="0" alt="bill gates" width="800" /></p><p>Microsoft is an <a href="http://www.businessinsider.com/microsoft-earnings-2014-1">insanely profitable company</a> standing <a href="http://www.businessinsider.com/smartphones-versus-pcs-2013-8">on the edge of disaster</a>. It desperately needs new thinking.</p>
<p>With word that 22-year Microsoft veteran Satya Nadella is likely the new CEO, attention turns to the leadership of the company's board of directors. It will have two former CEOs, Bill Gates and Steve Ballmer.</p>
<p>So new thinking is unlikely to come from them.</p>
<p>In fact, Gates has a track record of huge strategic errors that have cost the company years of progress in market share. Here's why he should be the one to go:</p>
<p><strong>1. Gates' world was: Go slow.</strong> Microsoft needs to change its corporate culture. Today&rsquo;s tech companies try to move fast and fail. They can fail because they move fast, which means that they can fix a mistake as fast as they create one. Microsoft has a historical culture of moving slow and not failing. That comes from a time when people installed software once very three years. Times have changed. Now companies deliver software via the cloud and can add or roll back new features every day.</p>
<p><strong>2. He almost missed the Internet.</strong> The Internet rose during Gates time as CEO, and he actually wasn't an Internet visionary. He entered the browser market long after Netscape, for example. His efforts to catch up and crush Netscape led Microsoft into an epic antitrust judgement and 10 years of oversight by the Department of Justice. Ultimately Microsoft&rsquo;s Internet products (browsers, web servers,&nbsp; development tools) did well and grabbed lots of market share. But Microsoft and Gates didn&rsquo;t lead here, they followed, and almost disastrously so.</p>
<p><strong>3. Speaking of the Internet, there&rsquo;s Bing.</strong> Bing is a fine service, but Microsoft will never beat Google by being a me-too search site. New leadership needs to figure that out.</p>
<p><strong>4. Gates not only missed the software open-source revolution, he was its No. 1 enemy.</strong> Open source, which is where developers freely share the code they create, has been a major change in the software industry in the past decade. It's almost a religion with young idealistic programmers. Gates (and Ballmer) saw it as a threat and threatened to sue it out of existence. They&rsquo;ve since softened their stance about some forms of open source. But bad blood still exists. Gates got this one very wrong.</p>
<p><strong>3. Like Ballmer, Gates missed the mobile revolution.</strong> By a mile. For years, Microsoft maintained that the PC would be the central device in all personal computing. Now, the PC is just one of many devices that are powered primarily by the cloud. And there are now fewer PCs sold than smartphones and tablets.</p>
<p><strong>4. Gates didn&rsquo;t spot the cloud early, either.</strong> Salesforce.com was founded in 1999, when Gates was still CEO of Microsoft. Once again, Microsoft entered cloud late and is now playing catch up to Amazon with Azure, and to Google with Office 365. Gates is not a cloud visionary.</p>
<p><strong>5. Gates could have nipped the Windows 8 disaster in the bud.</strong> There was exhaustive user testing while Windows was being developed indicating <a href="http://www.businessinsider.com/cms/posts/edit?id=52ec0c8b69bedd427dfd68fb">that people didn't like Windows 8</a>. Then Windows chief Steven Sinofsky plowed ahead anyway. Gates was chairman during all this. Windows is his legacy. Why didn&rsquo;t he step up with one of his epic rants and turn that ship around?</p>
<p><strong>6. Gates let Ballmer do the Surface tablet.</strong> The Surface, which combines hardware and software, was guaranteed to cause trouble with Microsoft&rsquo;s biggest hardware partners. And it has. HP, for instance, one of the world's biggest PC makers, <a href="http://www.businessinsider.com/meg-whitman-microsoft-is-our-competitor-2013-10">has publicly called Microsoft a competitor and run to Google</a>. Then Gates let Ballmer <a href="http://www.businessinsider.com/microsoft-buys-nokia-devices-2013-9">double down on hardware and buy Nokia for $7 billion</a>. Meanwhile, Google has announced plans to sell its own hardware business.</p>
<p><strong>7. Gates let Ballmer buy Skype for $8.5 billion.</strong> <a href="http://www.businessinsider.com/chart-of-ballmers-vision-for-microsoft-2013-9">The grand strategy</a> of that was ... what?</p>
<p><strong>8. The late bloomer thing has got to stop.</strong> With Gates at the helm, Microsoft became a company that tried to enter every successful tech market late, and then spent enormous resources catching up. This worked for a while, when the PC really was the center of the world. But now that has changed, and following won't work anymore.</p>
<p><strong>9. Gates is a brilliant philanthropist.</strong> In recent years, Gates has found his visionary role solving hard problems like poverty, illness, education, which obviously thrills him.</p>
<p>Having two former CEOs on the board will hinder a new CEO's ability to make the changes Microsoft needs to move forward. So, it's time for Bill Gates to leave Microsoft and concentrate on the philanthropic work that he loves.</p><p><strong>DON'T MISS:&nbsp;<a href="http://www.businessinsider.com/closer-look-at-microsofts-satya-nadella-2014-1" >Here's Why Microsoft Is Right To Pick Satya Nadella To Be CEO</a></strong></p>
<p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/apple-to-hire-100-more-in-enterprise-2014-1" > Apple Wants To Hire More Than 100 More People To Help It Make Better Products For The Enterprise</a></strong></p>
<p><a href="http://www.businessinsider.com/microsoft-board-bill-gates-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/sap-400-million-invalid-patent-fine-2014-1SAP Is Struggling To Get Out Of Paying A $400 Million Fine On A Patent That Doesn't Even Exist (SAP)http://www.businessinsider.com/sap-400-million-invalid-patent-fine-2014-1
Tue, 21 Jan 2014 20:13:00 -0500Julie Bort
<p><img style="float:right;" src="http://static1.businessinsider.com/image/515c8b2eecad047c4800001b-480-/bill-mcdermott-2.png" border="0" alt="Bill McDermott" width="480" /></p><p>If you need <a href="http://www.businessinsider.com/potential-progress-on-dealing-with-software-patents-2013-5">more evidence</a> that the software patent system is completely messed up, the legal battle between SAP and a company called Trilogy ought to convince you. In 2011, SAP lost a patent infringement case to Trilogy and was told to pay Trilogy nearly $400 million.</p>
<p>Trilogy held a patent relating to software that can adjust pricing based on variables such as who the customer is, what the customer is buying, and how big the order is, reports <a href="http://www.bloomberg.com/news/2014-01-21/sap-rejected-by-supreme-court-over-391-million-loss.html">Bloomberg's Susan Decker</a>. SAP began offering a similar tool to its customers and Trilogy sued. It won a $391 million judgment.</p>
<p>SAP lost an appeal and, then, a month later, the patent office invalidated the patent. That basically means the patent shouldn't have been issued in the first place. Those that seek software patent reform, <a href="https://www.eff.org/patent">such as the Electronic Frontier Foundation, </a>say that there are a lot of software patents like this, which should never have been granted.</p>
<p>But the courts didn't tell SAP that it no longer needed to pay the fine. On Tuesday, the U.S. Supreme Court refused to accept the case. This leaves SAP on the hot seat for the fine, even though the patent no longer exists.</p>
<p>SAP hasn't given up. A spokesperson told Business Insider:</p>
<p style="padding-left: 30px;">"Today's action by the Court was unfortunate but not unexpected. SAP will continue to move forward with this litigation. The patent claims at issue were declared invalid last year by the U.S. Patent and Trademark Office. That issue remains on appeal. We continue to believe we will prevail in this matter."&nbsp;</p>
<p>Meanwhile, the software industry is waiting for word on a case the Supreme Court has accepted that could mean the <a href="http://www.businessinsider.com/supreme-court-case-could-mean-death-of-software-patents-2013-12">death of software patents altogether.</a></p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/hp-david-scott-2014-1" >Meet The Guy Responsible For One Of HP's Most Successful Acquisitions</a></strong></p>
<p><a href="http://www.businessinsider.com/sap-400-million-invalid-patent-fine-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/minnesota-governor-angry-letter-to-ibm-2014-1Governor Blames IBM For Minnesota's Troubled Obamacare Website (IBM)http://www.businessinsider.com/minnesota-governor-angry-letter-to-ibm-2014-1
Mon, 06 Jan 2014 21:33:26 -0500Julie Bort
<p><img style="float:right;" src="http://static2.businessinsider.com/image/528d130169bedd8c0b98523f-480-/ibm-virginia-rometty.jpg" border="0" alt="IBM Virginia Rometty" width="480" /></p><p>Yet another state has blamed yet another large IT vendor for the problems with its Affordable Care website.</p>
<p>This time the state is Minnesota and the company on the hot seat is IBM.</p>
<p>In mid-December Minnesota <span style="font-size: 12.0pt; font-family: 'Georgia','serif';">Governor Mark Dayton</span> wrote a letter to CEO Ginny Rometty that dressed down IBM for a laundry list of big problems with the state's website, MNsure. The governor's office released the letter last week. (Posted in full below.)</p>
<p>Dayton told IBM:</p>
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<p style="padding-left: 30px;">Your product has not delivered promised functionality and has seriously hindered Minnesotans' abilities to purchase health insurance or apply for public health care programs through MNsure.... your product has significant defects, which have seriously harmed Minnesota consumers.</p>
<p>IBM's software is used by the website to determine eligibility. He says it caused the Minnesota site to experience these problems:</p>
<ul>
<li>It allowed people to submit multiple applications without keeping track. This "forced MNsure staff to spend thousands of hours" trying to clean up the data, he says.</li>
<li>It didn't do a reliable job of verifying eligibility in accordance with Federal law, he says, and left some applications floating in "pending status" where the state couldn't move the application forward and let people buy insurance.</li>
<li>Plus, he says, thousands of applications got "stuck in a queue" unable to be processed at all, he wrote. MNsure staff apparently didn't even know these stuck applications existed.</li>
</ul>
<p>All told, the letter blamed IBM for 21 problems.</p>
<p>IBM&rsquo;s Curam subsidiary wasn't the main contractor, but one several subcontractors working on the $46 million project. IBM says the main contractor, a company called Maximus, had "overall responsibility" for the site, including testing that it worked properly.</p>
<p>After getting the letter, IBM swiftly sent dozens of workers to St. Paul and agreed to give the state 4,000 man-hours at no charge, reports <a href="http://www.startribune.com/politics/statelocal/238634681.html">the StarTribune's Jackie Crosby.</a></p>
<p>Things are working better, though not perfectly, now, IBM says.</p>
<p>On Friday, MNsure said 67,805 people had enrolled, including 14,600 who signed up in the last four days of December.</p>
<p>To be sure, IBM isn't the only big vendor to be blamed for problems with a state health insurance exchange.</p>
<p>In November, Oregon Senator Jeff Merkley <a href="http://www.businessinsider.com/oracle-blamed-for-oregon-obamacare-site-2013-11">blasted Oracle on television for problems</a> with Oregon's website. Last month, Oregon Governor John Kitzhaber even said it would delay making <a href="http://www.kgw.com/news/Kitzhaber-calls-for-Cover-Ore-investigation-developer-payment-withheld-236075811.html">a $20 million payment to Oracle until the site was fixed. </a>Oracle had no comment.</p>
<p>The truth is, that that these health care exchanges are like a perfect storm. Some 40% of large scale, complex software projects like these are disasters, a 2012 <a href="http://www.mckinsey.com/insights/business_technology/delivering_large-scale_it_projects_on_time_on_budget_and_on_value">McKinsey study</a> revealed. Add in politicians, public pressure and something as important as health insurance, and trouble with some of them is guaranteed.</p>
<p>Here's IBM's full statement:</p>
<p style="padding-left: 30px;">"The majority of concerns with the Curam software that were expressed by Governor Dayton three weeks ago have been addressed. These are not the only issues related to the performance of the MNSure system. IBM is just one of several subcontractors working on this project. The prime contractor, Maximus, Inc, has overall responsibility for the MNsure system including integration and testing of all the components prior to October 1. IBM continues to work closely with the other suppliers and the State of Minnesota to make MNsure a more positive experience for Minnesota citizens. As an example, the percent of suspended applications for coverage decreased by two thirds between mid-December and early January and the system is now handling cases at over a 95% daily success rate.</p>
<p style="padding-left: 30px;">"To sustain the progress, we are providing on-site services and technical resources beyond the scope of IBM's contractual responsibilities to assist the State in resolving the remaining issues as quickly as possible. IBM Senior Vice President for Software Solutions, Mike Rhodin, has made this project a priority and has been in regular contact with Governor Dayton and the MNSure leaders. Although our original role on this project was limited, we are bringing the full resources and capabilities of IBM to the State because of the importance of the success of the project."</p>
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<p>Here's the full letter:</p>
<p><iframe width="100%" height="600" frameborder="0" src="//www.scribd.com/embeds/196689332/content?start_page=1&amp;view_mode=scroll&amp;show_recommendations=true" data-auto-height="false" data-aspect-ratio="undefined"></iframe></p>
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</div><p><a href="http://www.businessinsider.com/minnesota-governor-angry-letter-to-ibm-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/saps-top-cloud-guy-has-left-2014-1SAP's Top Cloud Guy Has Left Causing SAP To Reshuffle Some Software Units (SAP)http://www.businessinsider.com/saps-top-cloud-guy-has-left-2014-1
Mon, 06 Jan 2014 19:23:50 -0500Julie Bort
<p><img style="float:right;" src="http://static3.businessinsider.com/image/52cb423269bedd173117e56b-480-/sap-shawn-price-1.png" border="0" alt="SAP Shawn Price" width="480" /></p><p>Two of SAP's top cloud executives have resigned a little more than a year after they joined the company.</p>
<p>Both came on board as part of SAP's $4.3 billion acquisition of Ariba that closed in October, 2012.</p>
<p>Bob Calderoni is one of the execs leaving, a SAP spokesperson confirmed. (The news was first broken by the <a href="http://spendmatters.com/2014/01/06/bob-calderoni-kevin-costello-leave-sap-new-chapter-ariba-inside-sap/">Spend Matters blog.</a>)&nbsp; He was president of SAP Cloud and formerly the CEO of Ariba. A SAP spokesperson says he's leaving on good terms and will stick around as an advisor to SAP.</p>
<p>At the same time, Kevin Costello, who was running the Ariba business under SAP as president is also going, a spokesperson confirmed.</p>
<p>Calderoni became part of SAP's cloud leadership team in November, 2012 and the unchallenged top cloud guy after SuccessFactor's founder Lars Dalgaard left SAP last spring.&nbsp; SAP bought SuccessFactors for $3.5 billion in 2012 and Dalgaard lasted about a year at SAP, too.</p>
<p>With Calderoni gone, SAP is trying a new tactic. It is promoting <a href="http://www.linkedin.com/in/shawnprice1">Shawn Price</a> to the top cloud spot and also reorganizing some of its non-cloud software businesses under Price. Price has been at SAP for a little over a year, running SuccessFactors.</p>
<p>And SAP says, more shuffling will be announced soon.</p>
<p>In addition to the cloud (which includes SuccessFactors and Ariba), Price will be responsible for certain "on premises" software units, meaning software that companies buy and install in their own data centers. He'll have the CRM software (customer relationship management), which competes with Salesforce.com and Oracle. He will also be responsible for other human resources software, competing with WorkDay and Oracle.</p>
<p>One interesting <a href="https://www.successfactors.com/en_us/company/management-team/shawn-price.html">thing about Price</a> is that before joining SAP, he spent almost three years as president of hot cloud startup Zuora.</p>
<p>Zuora is a cloud service for invoices that competes with financial software from SAP and Oracle. Its co-founder, Tien Tzuo, is who's who in the Valley's startup world. He was an early employee of Salesforce.com and Salesforce's CEO Marc Benioff is an investor in Zuora.</p>
<p>Tzuo <a href="http://www.businessinsider.com/the-hottest-cloud-startups-2013-10%20">famously told us that</a> "Oracle and SAP are dead. They just don't know it yet."</p>
<p>So by choosing Price to lead SAP's cloud efforts, SAP is looking for ways to combat the cloud startups that are challenging it.</p>
<p>Here's the full statement SAP sent us:</p>
<p style="padding-left: 30px;">After successfully leading the transition of Ariba into SAP, Bob Calderoni has taken the decision to leave SAP. We have benefitted greatly from Bob&rsquo;s vision in building SAP&rsquo;s leadership in the cloud, and we are grateful that Bob will remain as a strategic advisor to the Managing Board. We thank him for his efforts and wish him well in his endeavors.</p>
<p style="padding-left: 30px;">We continue to simplify our organization as the cloud becomes an integral part of SAP&rsquo;s business. As part of this effort, Shawn Price will become president, Global Cloud &amp; Line of Business. In this new role, Shawn expands on his previous position of president of SuccessFactors, to drive SAP&rsquo;s strategy and revenue generation across the lines of business, including HR, Sales, Service, Procurement, and Business Network, for both cloud and on-premise offerings. We expect to make additional organizational announcements in the coming weeks to provide our customers with a seamless experience and deliver on the promise of the SAP Cloud powered by SAP HANA.</p><p><a href="http://www.businessinsider.com/saps-top-cloud-guy-has-left-2014-1#comments">Join the conversation about this story &#187;</a></p> http://www.businessinsider.com/oracle-reorgs-makes-nice-with-hp-2013-12Source: Oracle Is Quietly Reorganizing Its Sales Force And Signing A Huge Agreement With HP (ORCL)http://www.businessinsider.com/oracle-reorgs-makes-nice-with-hp-2013-12
Tue, 17 Dec 2013 20:16:00 -0500Julie Bort
<p><img style="float:right;" src="http://static6.businessinsider.com/image/523fb8d4eab8ea755eefd356-480-/larry-ellison-913.png" border="0" alt="Larry Ellison" width="480" /></p><p>Oracle will report its quarterly financial results at the close of the stock market on Wednesday. Analysts are expecting flat revenues but we're hearing that there could be a couple of bigger items of interest:</p>
<ul>
<li>A reorganization of the U.S. sales force, which may be announced only internally, not publicly.</li>
<li>A big new agreement with former-partner-turned-bitter-rival, Hewlett Packard.</li>
</ul>
<p>Both of those tidbits come from Wall Street analyst Pat Walravens, director of technology research for JMP Securities, one of the analysts who closely follows Oracle <a href="http://www.businessinsider.com/oracles-anthony-fernicola-joins-salesforcecom-2013-8">and breaks a lot of news about the company.</a></p>
<p>Walravens&nbsp;tells us that the reorg could be taking place in the current quarter and that people inside Oracle expect to be called into a meeting "to announce the change later this week." There may also be news about a restructured hardware business.</p>
<p>Oracle declined comment when reached by Business Insider.</p>
<p>Most analysts are expecting less-than-stellar financial results from Oracle. The consensus is 67 cents a share on sales of $9.2 billion. That's flat revenues from the year-ago quarter, and slightly improved profits.</p>
<p>Walravens expects software sales to be flat, and hardware revenue to be worse than expected, diving 13%. Oracle has said hardware revenue will be down 1% - 11%. Oracle's hardware sales have declined heavily for 11 quarters in a row.</p>
<p>So a reorg of the North American sales force could be good news.</p>
<p><a href="http://www.businessinsider.com/oracle-sales-force-changes-2013-9">As we've previously reported,</a> Oracle president Mark Hurd has been systematically overhauling the sales force for more than two years, but so far, his changes haven't sparked the kind of growth analysts would like to see.</p>
<p>When he began, we started hearing stories about how some of the company's <a href="http://www.businessinsider.com/oracle-former-employees-explain-why-it-cant-sell-hardware-2012-4">more experienced salespeople were quitting</a> because the atmosphere had become too cutthroat and stressful.</p>
<p>A few weeks ago, we talked to one salesperson who quit the company less than a year after joining. This person told us that, under Hurd, the sales territory was less than 20 square miles of a metropolitan area and included so few companies that it would have been very difficult to earn the quota Oracle expected, about $2 million in annual sales.</p>
<p>"My territory was extremely small. The amount of business I could call on, I exhausted that in the amount of time I was there. They wanted you to keep calling those same companies. I'm not the kind of sales rep that's going to call on the same company over and over," this person told us.</p>
<p>Walravens is hearing similar stories. As he reported in his research note, an Oracle reseller told him that in one territory alone Oracle had "16 reps just [selling] on the database. I don&rsquo;t know how they make a living."</p>
<p>We're told that the North American sales teams to be restructured report to <a href="http://www.oracle.com/us/corporate/press/executives/matthew-mills-bio-1686531.html">Matt Mills</a>. These could be the teams that included top North American sales guy <a href="http://www.businessinsider.com/oracles-anthony-fernicola-joins-salesforcecom-2013-8">Anthony Fernicola, who moved to Salesforce.com.</a> (Correction: The story originally said Mills took over for Fernicola. We've since been told that this is not correct.)</p>
<p>On top of all that, Oracle may have patched up its relationship with HP.</p>
<p>Walravens understands that HP has signed a $150 million contract to renew its Oracle licenses, a contract that may or may not be announced. HP has always been a big Oracle customer, and for decades was a close partner who helped sell Oracle technology. But their relationship went south after Oracle bought Sun and started competing head-to-head in the hardware market with HP.</p>
<p>Oracle also hired Hurd after HP asked him to resign as CEO, which lead to a lawsuit that was ultimately settled. Then Oracle said it would stop making its database software for HP's flagship Itanium computer servers. That lead to another lawsuit, <a href="http://www.businessinsider.com/hp-wins-its-lawsuit-against-oracle-2012-8">which HP won</a>.</p>
<p>Given its lack of overall growth, Oracle may have decided it needs HP again. Given Oracle's lackluster hardware sales, HP may have decided that Oracle isn't much of a threat. "Sun is a lot smaller than when Oracle bought it," Walravens points out.</p>
<p>If that's the case, the companies may announce a big kiss-and-make-up partnership, similar to the one Oracle signed <a href="http://www.businessinsider.com/oracle-and-salesforce-partner-on-cloud-2013-6">last summer</a> with another friend-turned-rival, <a href="http://www.businessinsider.com/oracle-and-salesforce-partner-on-cloud-2013-6">Salesforce.com.</a></p>
<p>But that's just speculation at this point. Sources close to HP tell us that they haven't heard about a new contract or partnership with Oracle.</p>
<p>HP also had no comment.</p><p><strong>SEE ALSO:&nbsp;<a href="http://www.businessinsider.com/oracle-sales-force-changes-2013-9" >THE MOMENT OF TRUTH: It's Crunch Time For Oracle And Mark Hurd</a></strong></p>
<p><a href="http://www.businessinsider.com/oracle-reorgs-makes-nice-with-hp-2013-12#comments">Join the conversation about this story &#187;</a></p>